First-Time Home Buyer Closing Costs in Ontario — What You Actually Owe

Most first-time buyers spend months saving their down payment — then get their lawyer’s Statement of Adjustments two weeks before closing and discover they owe thousands more than they budgeted. It happens constantly. Not because the costs are hidden, but because nobody walked them through the full picture before they made an offer.

This guide does that. It breaks down every closing cost Ontario first-time buyers pay in 2026 — what each one is, what it costs at three GTA price points, and what you can do to reduce it. If you haven’t read the full first-time buyer walkthrough yet, start with The First-Time Home Buyer’s Complete Guide to Buying in Ontario (2026) and come back here for the cost detail.

 

Key Facts — Closing Costs for First-Time Buyers in Ontario (2026)

Closing costs in Ontario are separate from your down payment and must be paid in cash on closing day — they cannot be added to your mortgage. First-time buyers in Ontario should budget 1.5% to 2.5% of the purchase price for closing costs on homes outside Toronto, and 3% to 4% on homes inside the City of Toronto where both land transfer taxes apply. Ontario’s provincial Land Transfer Tax (LTT) rebate for first-time buyers is up to $4,000, covering the full tax on homes priced at $368,000 or less. Source: Government of Ontario Ministry of Finance. Toronto’s Municipal Land Transfer Tax (MLTT) rebate for first-time buyers is up to $4,475, covering the full municipal tax on homes priced at $400,000 or less. Source: City of Toronto. Combined, Toronto first-time buyers can save up to $8,475 in land transfer tax rebates — provincial and municipal combined. Legal fees in the GTA typically run $1,500 to $2,500, plus disbursements for title searches, registration, and other administrative costs. Title insurance is a one-time premium of approximately $200 to $400 and is required by most lenders. CMHC mortgage default insurance premiums range from 0.6% to 4.5% of the mortgage amount for buyers putting down less than 20%, and are added to the mortgage balance — not paid as a separate upfront cost. Source: Canada Mortgage and Housing Corporation. On a $700,000 home in Brampton with 10% down ($70,000), total closing costs outside the down payment typically run $12,000 to $19,000. New construction homes in Ontario are subject to HST (13%) on the purchase price, partially offset by the federal and provincial HST rebates. Resale homes are not subject to HST.

 

If You Only Read One Section

Closing costs are not optional and they are not negotiable down to zero. Plan for them the same way you plan for your down payment. The two largest costs for most GTA buyers are land transfer tax and legal fees. Know both numbers before you make an offer. If you are buying in Brampton, Mississauga, or anywhere outside the City of Toronto boundary, you pay only the provincial LTT — not the Toronto municipal tax. That saves you thousands. First-time buyers are entitled to rebates on both land transfer taxes. Apply for them. Your lawyer handles the filing, but you need to confirm eligibility before closing. Budget a minimum of 1.5% of the purchase price for closing costs outside Toronto, and 3% inside Toronto. Have this money in your account, in addition to your down payment, before you remove your financing condition.

 

What Are Closing Costs in Ontario?

What Is a Closing Cost?

A closing cost is any fee, tax, or expense paid by a buyer on the day ownership of a property legally transfers from the seller to the buyer. Closing costs are separate from the down payment and are paid directly through your real estate lawyer. In Ontario, the Financial Consumer Agency of Canada (FCAC) advises buyers to budget for closing costs before making an offer — not after.

The key point most buyers miss: closing costs must be paid in cash. You cannot borrow them through your mortgage. They need to be sitting in your bank account on closing day, in addition to your down payment.

 

The Complete Closing Cost Breakdown

What Is Land Transfer Tax in Ontario?

Land transfer tax is a provincial tax paid by the buyer when a property changes ownership in Ontario. It is calculated on a marginal rate scale based on the purchase price. First-time buyers receive a rebate of up to $4,000 from the Government of Ontario Ministry of Finance. The full rebate covers homes priced up to $368,000. For homes above $368,000, buyers receive the maximum $4,000 rebate and pay the remaining balance out of pocket.

On a $700,000 home outside Toronto, the provincial LTT is approximately $9,475. After the first-time buyer rebate of $4,000, you owe approximately $5,475.

On a $900,000 home outside Toronto, the provincial LTT is approximately $13,475. After the rebate, you owe approximately $9,475.

What Is the Toronto Municipal Land Transfer Tax?

The Toronto Municipal Land Transfer Tax (MLTT) is a second land transfer tax charged exclusively on properties within the City of Toronto boundary — north to Steeles Avenue, east to Scarborough, west to Etobicoke. It is calculated at the same rates as the provincial LTT. First-time buyers receive a rebate of up to $4,475 from the City of Toronto. The full rebate covers homes priced up to $400,000.

If you buy in Brampton, Mississauga, Vaughan, Markham, or anywhere else outside the Toronto boundary, you do not pay the MLTT — only the provincial LTT. This is one reason the same property type is meaningfully cheaper to close on in Brampton than in Toronto.

Note: Toronto City Council approved new graduated MLTT rates for residential properties selling for over $3 million, taking effect April 1, 2026. These changes do not affect the vast majority of first-time buyers — the standard rates and the $4,475 first-time buyer rebate are unchanged.

 

Closing Costs at Three GTA Price Points

These figures are estimates based on current rates and typical GTA legal fees. Your lawyer will provide exact numbers in your Statement of Adjustments before closing.

Cost Item	$600,000 Purchase	$800,000 Purchase
Purchase price	$600,000	$800,000
Down payment (10%)	$60,000	$80,000
Provincial LTT (before rebate)	~$8,475	~$11,475
First-time buyer LTT rebate	−$4,000	−$4,000
Provincial LTT (after rebate)	~$4,475	~$7,475
Toronto MLTT (if applicable)	~$8,475 − $4,475 rebate = ~$4,000	~$11,475 − $4,475 rebate = ~$7,000
Legal fees + disbursements	$1,800 – $2,500	$1,800 – $2,500
Title insurance	$200 – $350	$250 – $400
Home inspection	$400 – $600	$400 – $700
Property tax adjustment	Varies by date	Varies by date
Total outside Toronto (approx)	$7,000 – $9,000	$10,000 – $13,000
Total inside Toronto (approx)	$14,000 – $17,000	$19,000 – $24,000

 

Note: CMHC mortgage default insurance premium is added to your mortgage balance — not included in the closing cost cash figures above. On a $600,000 purchase with 10% down, the CMHC premium is approximately $13,500 added to your mortgage. Source: Canada Mortgage and Housing Corporation.

 

A $700,000 townhouse in Mississauga with 10% down — $70,000 — illustrates the gap between planning and reality. Provincial LTT after the first-time buyer rebate runs approximately $6,475. Legal fees add another $2,000 to $2,500. Title insurance and home inspection bring the total closing costs to roughly $9,500 to $12,000 on top of the down payment. That’s $80,000 to $82,000 in total cash needed on closing day. Buyers who budgeted only for the down payment are often caught short by $8,000 to $12,000 with two weeks to go.

 

Other Costs to Know Before You Close

What Are Legal Fees and Disbursements?

Legal fees are the charges your real estate lawyer bills for completing the title transfer, reviewing the agreement of purchase and sale, registering your mortgage, and managing the flow of funds on closing day. Disbursements are the out-of-pocket costs your lawyer pays on your behalf — title searches, government registration fees, courier charges, and similar administrative expenses. In the GTA, budget $1,500 to $2,500 for legal fees plus $300 to $600 for disbursements. Ask for a written fee estimate before you retain your lawyer.

What Is Title Insurance in Ontario?

Title insurance is a one-time premium that protects you and your lender against losses from title defects, fraud, survey errors, and certain issues that a title search might not catch. Most lenders require it as a condition of the mortgage. The premium is typically $200 to $400 and is paid at closing through your lawyer. It covers you for as long as you own the property — there are no ongoing premiums.

What Is a Property Tax Adjustment?

Property taxes in Ontario are paid by the seller for the full calendar year, or in installments. When you buy mid-year, your lawyer calculates the exact number of days you will own the property in the current tax year and reimburses the seller for taxes already paid that cover your ownership period. This adjustment appears on your Statement of Adjustments and can add $1,000 to $3,000 to your closing costs depending on when you close and the property’s assessed value.

What Is HST on New Construction Homes?

If you are buying a newly built home or condo in Ontario, HST (13%) applies to the purchase price. For resale homes, HST does not apply. New build buyers are eligible for the federal GST/HST rebate and the Ontario HST new housing rebate, which together can offset a significant portion of the tax. The rebate structure is managed by the Canada Revenue Agency. Confirm the net HST amount with your builder and lawyer before closing — it can add tens of thousands of dollars to your closing costs if not accounted for.

 

Already doing the math and wondering where you actually stand? The numbers in this article are estimates. Your actual closing costs depend on your specific purchase price, property location, closing date, and lawyer. The Shah Team works with first-time buyers across Brampton, Mississauga, Toronto, and the GTA — and part of what we do is help you budget accurately before you make an offer, not after. Call or text: 647-892-2411

 

How to Reduce Your Closing Costs as a First-Time Buyer

You cannot eliminate closing costs, but you can reduce them with a few straightforward steps.

• Apply for every rebate you qualify for. The provincial LTT rebate (up to $4,000) and the Toronto MLTT rebate (up to $4,475) are not automatic in all cases — confirm your eligibility with your lawyer before closing.
• Buy outside the City of Toronto if the math works. A comparable property in Brampton or Mississauga does not trigger the Toronto MLTT, saving you up to $7,000 to $11,000 in land transfer tax on a typical GTA purchase.
• Get a written fee estimate from your lawyer before retaining them. Legal fees vary. A five-minute call before signing a retainer can save you several hundred dollars.
• Ask your lawyer about title insurance options. Lender-only title insurance protects the bank but not you personally. Owner’s title insurance costs slightly more but protects both. Worth the difference.
• Budget accurately from the start. The single most effective way to reduce closing cost stress is to know the full number in advance and have it in your account before you remove your financing condition.

[Internal Link: First-Time Home Buyer Closing Costs in Ontario — Complete Breakdown]

 

Frequently Asked Questions

Do I pay closing costs on top of my down payment?

Yes. Closing costs are completely separate from your down payment. On a $750,000 home with a 10% down payment, you need $75,000 for the down payment plus an additional $10,000 to $18,000 for closing costs — all in cash, all available on closing day. Your lender will not finance closing costs.

When exactly are closing costs paid?

Closing costs are paid on closing day — the date ownership officially transfers from the seller to you. Your lawyer handles the payments on your behalf. You need to have the full amount transferred to your lawyer’s trust account before closing, typically two to three business days in advance. Your Statement of Adjustments gives you the exact breakdown.

Can I negotiate closing costs with the seller?

Land transfer tax, legal fees, and title insurance are not negotiable — they are fixed by law or standard practice. What you can sometimes negotiate is the closing date, which affects the property tax adjustment amount. A closing date near the end of the tax cycle means a smaller adjustment. This is a minor saving but worth considering if your closing date is flexible.

Does the first-time buyer rebate apply automatically?

The provincial LTT rebate can be claimed at the time of electronic registration through your lawyer. If not claimed at registration, you have 18 months to file a refund application with the Ontario Ministry of Finance. The Toronto MLTT rebate follows the same process through the City of Toronto. Confirm with your lawyer that both rebates are being applied — do not assume.

Are closing costs tax deductible in Ontario?

No. Land transfer tax, legal fees, and title insurance are not tax deductible on a personal income tax return for a principal residence. They are considered personal expenses. The one exception is if you are purchasing an investment property — certain closing costs can be added to the adjusted cost base of the property, which reduces your capital gain when you eventually sell. Consult your accountant if this applies to your situation.

 

What to Remember

Budget for closing costs before you budget for a property. Know the full cash requirement — down payment plus closing costs — before you set your purchase ceiling. Outside Toronto: 1.5% to 2.5% of the purchase price. Inside Toronto: 3% to 4%. Have this money available in addition to your down payment. Apply for both land transfer tax rebates. First-time buyers can save up to $8,475 combined — but you need to confirm eligibility and apply correctly. Get your Statement of Adjustments from your lawyer at least one week before closing. Review every line. Ask about anything you don’t recognise. Have the full closing amount in your lawyer’s trust account two to three business days before closing day. Last-minute wire transfers cause delays.

 

I’m Gaurang Shah, a real estate broker at Royal LePage Flower City. I work with first-time buyers across Brampton, Mississauga, Toronto, and the GTA. If you want to know exactly what your closing costs will be before you make an offer — not a generic estimate but numbers based on your actual purchase price and location — book a free 30-minute buyer conversation. No obligation. You’ll leave with a clear answer. Book a Free Buyer Conversation: https://meetings.hubspot.com/gaurang-reena/discovery-call-15-min Or call: 647-892-2411

 

References

1. Government of Ontario Ministry of Finance — Land Transfer Tax and First-Time Homebuyer Refund
2. City of Toronto — Municipal Land Transfer Tax Rates, Fees, and First-Time Buyer Rebate
3. City of Toronto — Council approval of new MLTT graduated rates for high-value residential properties, December 17, 2025, effective April 1, 2026
4. Financial Consumer Agency of Canada — Understanding Closing Costs (Step 6: Understand Closing Costs)
5. Canada Mortgage and Housing Corporation — Mortgage Loan Insurance Premiums
6. Canada Revenue Agency — GST/HST New Housing Rebate
7. Real Estate Council of Ontario — Consumer Information: Buying a Home in Ontario
8. Toronto Regional Real Estate Board — January 2026 Market Watch (February 4, 2026)