Toronto Closing Costs Breakdown 2026: What Every Buyer Needs to Budget
Condo123 · March 29, 2026
Closing Costs in Toronto: The Expense That Catches Buyers Off Guard
You've saved for your down payment, locked in your mortgage rate, and found the perfect property. Then your lawyer hands you a bill for tens of thousands of dollars you weren't expecting. Sound familiar? You're not alone. Closing costs in Toronto are one of the most underestimated expenses in the home-buying process, and in 2026, they can add anywhere from $15,000 to $50,000 or more on top of your purchase price.
Unlike other major Canadian cities, Toronto buyers face a unique challenge: double land transfer tax. The combination of the Ontario Land Transfer Tax and the Toronto Municipal Land Transfer Tax means closing costs here are significantly higher than in surrounding cities like Mississauga, Brampton, or Hamilton.
Whether you're a first-time home buyer in Toronto or a seasoned investor, this guide will walk you through every closing cost you need to budget for in 2026, complete with real dollar amounts, worked examples, and strategies to keep more money in your pocket.
How Much Should You Budget for Closing Costs in Toronto?
The general rule of thumb is that closing costs in Ontario range from 1.5% to 4% of the purchase price. However, the exact amount depends on several factors:
- Location: Buying in Toronto proper means paying the Municipal Land Transfer Tax on top of the provincial one. Buying just outside the city (Mississauga, Markham, Vaughan) eliminates this extra tax entirely.
- Buyer status: First-time home buyers qualify for significant rebates that can reduce land transfer tax by up to $8,475 in Toronto.
- Down payment size: If your down payment is less than 20%, you'll need CMHC mortgage insurance, which adds thousands to your upfront costs.
- Property type: Condominiums have additional costs like status certificate fees. Pre-construction homes come with their own unique closing cost considerations.
For a quick estimate: on a $700,000 home in Toronto, a first-time buyer should budget roughly $20,000 to $30,000 in closing costs, while a repeat buyer could face $25,000 to $35,000 or more. Let's break down exactly where that money goes.
Complete Closing Cost Breakdown for Toronto in 2026
Below is a comprehensive look at every closing cost you may encounter when purchasing a home in Toronto. We've organised them from largest to smallest so you can see where the bulk of your money goes.
Land Transfer Tax (Ontario LTT + Toronto MLTT)
The land transfer tax is the single largest closing cost for Toronto home buyers, and it's the main reason closing costs in Toronto are higher than almost anywhere else in Ontario. Toronto is the only city in the province that levies its own municipal land transfer tax on top of the provincial one.
Ontario Land Transfer Tax rates (2026):
| Purchase Price Portion | Tax Rate |
|---|---|
| First $55,000 | 0.5% |
| $55,001 to $250,000 | 1.0% |
| $250,001 to $400,000 | 1.5% |
| $400,001 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
Toronto Municipal Land Transfer Tax rates (2026):
| Purchase Price Portion | Tax Rate |
|---|---|
| First $55,000 | 0.5% |
| $55,001 to $250,000 | 1.0% |
| $250,001 to $400,000 | 1.5% |
| $400,001 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
On a $700,000 home in Toronto, the combined land transfer tax works out to approximately $18,950 before any rebates. That's roughly $9,475 for each tax. For a detailed walkthrough of the provincial tax and all available rebates, see our Ontario Land Transfer Tax Guide for 2026.
First-time buyer rebates: If you qualify as a first-time home buyer, you can claim rebates on both taxes. The Ontario LTT rebate is worth up to $4,000, and the Toronto MLTT rebate is worth up to $4,475, for a combined maximum savings of $8,475. This is one of the most valuable incentives available to new buyers in the city.
Legal Fees
Hiring a real estate lawyer is mandatory in Ontario for property transactions. Unlike some provinces where notaries can handle closings, Ontario requires a licensed lawyer to oversee the transfer of property ownership.
Typical cost: $1,200 to $1,500 (including disbursements)
Your lawyer's fees cover a wide range of services:
- Title search: Verifying that the seller has clear title to the property and there are no liens, encumbrances, or legal issues
- Agreement of Purchase and Sale (APS) review: Ensuring the contract protects your interests and explaining any clauses you may not understand
- Land registration: Filing the deed transfer and mortgage registration with the Ontario Land Registry
- Fund transfer: Coordinating the transfer of your down payment and mortgage funds to the seller on closing day
- Disbursements: Out-of-pocket expenses your lawyer pays on your behalf, including courier fees, registration fees, and search costs
While it may be tempting to choose the cheapest lawyer you can find, real estate transactions involve hundreds of thousands of dollars. An experienced real estate lawyer can catch issues that save you far more than the difference in fees.
Title Insurance
Typical cost: $250 to $500 (one-time fee)
Title insurance is a one-time policy that protects you against problems with your property's title that may not have been discovered during the standard title search. This includes:
- Title defects: Errors in public records, unknown liens, or claims against the property
- Title fraud: Someone fraudulently selling or mortgaging your property without your knowledge
- Survey issues: Boundary disputes, encroachments, or structures that violate municipal bylaws
- Building permit problems: Previous owners who completed renovations without proper permits
While title insurance is technically optional, virtually every mortgage lender in Canada requires it, and most real estate lawyers strongly recommend it. At $250 to $500, it's one of the most cost-effective forms of protection you can buy for an asset worth hundreds of thousands of dollars.
Home Inspection
Typical cost: $400 to $700
A home inspection is a thorough examination of the property's physical condition, covering the foundation, roof, plumbing, electrical, HVAC systems, insulation, and more. While not legally required, a home inspection is one of the smartest investments you can make when buying a resale property.
In Toronto's competitive market, some buyers have been tempted to waive the home inspection condition to make their offers more attractive. This is a risky strategy that can lead to costly surprises down the road. Even in a multiple-offer situation, consider getting a pre-offer inspection if the seller permits access to the property before offer night.
For condominiums, a standard home inspection may be less critical since the condo corporation maintains the building's major systems, but an inspection of the individual unit's plumbing, electrical, and appliances is still worthwhile.
Appraisal Fee
Typical cost: $300 to $600
Your mortgage lender may require an independent appraisal to confirm that the property is worth what you're paying for it. The appraisal protects the lender by ensuring they aren't lending more than the property is worth.
The good news: many lenders cover the appraisal fee as part of their mortgage package, especially for conventional mortgages (20% or more down payment). Before paying out of pocket, ask your mortgage broker or lender whether the appraisal is included. If it's not, this is a negotiable item, so don't hesitate to ask.
CMHC Mortgage Insurance
Required if your down payment is less than 20% of the purchase price
If you're putting down less than 20%, Canadian law requires you to purchase mortgage default insurance, commonly known as CMHC insurance (though it can also be provided by Sagen or Canada Guaranty). This insurance protects the lender, not you, in case you default on your mortgage.
CMHC insurance premium rates (2026):
| Down Payment | Premium (% of Mortgage) |
|---|---|
| 5% to 9.99% | 4.00% |
| 10% to 14.99% | 3.10% |
| 15% to 19.99% | 2.80% |
The insurance premium is typically added to your mortgage balance, so you don't need to pay it upfront. However, Ontario charges PST (8%) on the CMHC insurance premium, and this amount must be paid at closing. This is a cost many buyers overlook.
For example, on a $600,000 condo with 5% down ($30,000), your mortgage would be $570,000 and the CMHC premium would be $22,800 (4.00%). The PST on that premium is $1,824, due at closing.
Closing Adjustments
Typical cost: $300 to $500
Closing adjustments are reimbursements to the seller for expenses they've already prepaid beyond the closing date. Common adjustments include:
- Property taxes: If the seller has prepaid property taxes for the full year and you're closing mid-year, you'll reimburse them for the portion covering the period after closing
- Utility bills: Prepaid water, gas, or hydro charges
- Condo fees: If the seller has already paid the condo maintenance fee for the month and you're closing mid-month, you'll reimburse the prorated amount
- Fuel oil: For homes with oil heating, you'll pay for any oil remaining in the tank
Your lawyer will calculate all closing adjustments and include them in your final statement of adjustments, which you'll receive a few days before closing.
Status Certificate (Condominiums)
Typical cost: ~$100
If you're buying a condominium, the status certificate is an essential document that provides a snapshot of the condo corporation's financial and legal health. It includes:
- The reserve fund balance and most recent reserve fund study
- Any pending or ongoing lawsuits involving the condo corporation
- Outstanding common expense fees owed by the unit
- The condo corporation's insurance details
- Any planned special assessments
Your lawyer should review the status certificate carefully before you waive conditions. A condo corporation with a depleted reserve fund or pending special assessments could mean unexpected costs down the road. When you're ready to start your search, browse available condos and homes on Condo123 to find your ideal property.
Government Registration Fees
Typical cost: ~$200
These are the fees charged by the Ontario government to register the deed transfer and your mortgage on title. They're relatively minor in the grand scheme of closing costs but are a required part of every transaction. Your lawyer will include these in their disbursement charges.
Moving Costs
Typical cost: $500 to $2,000
While not a legal closing cost, moving expenses are a real cost that hits your wallet at the same time as everything else. The amount varies depending on:
- Distance: A local move within Toronto is cheaper than moving from another city
- Volume: A one-bedroom condo move costs significantly less than a four-bedroom house
- Timing: Moving on weekdays or mid-month is typically cheaper than weekends or month-end
- Services: Packing services, specialty item handling, and temporary storage all add to the cost
Budget at least $1,000 to $1,500 for a typical local move in the Toronto area.
Closing Cost Examples: Three Real Scenarios
Let's put everything together with three detailed examples showing exactly how much you'd pay in closing costs for different situations in 2026.
Scenario 1: $600,000 Condo in Toronto (First-Time Buyer, 5% Down)
| Closing Cost Item | Amount |
|---|---|
| Ontario Land Transfer Tax | $8,475 |
| Toronto Municipal Land Transfer Tax | $8,475 |
| First-Time Buyer Rebate (Ontario LTT) | -$4,000 |
| First-Time Buyer Rebate (Toronto MLTT) | -$4,475 |
| Net Land Transfer Tax | $8,475 |
| Legal Fees (incl. disbursements) | $1,500 |
| Title Insurance | $350 |
| Home Inspection | $450 |
| Appraisal Fee | $400 |
| PST on CMHC Insurance ($570K x 4.0% x 8%) | $1,824 |
| Status Certificate | $100 |
| Closing Adjustments | $400 |
| Government Registration Fees | $200 |
| Moving Costs | $1,000 |
| Total Estimated Closing Costs | $14,699 |
In this scenario, the first-time buyer rebates save $8,475, which is enormous. Without those rebates, total closing costs would jump to over $23,000. Note that the CMHC insurance premium of $22,800 is added to the mortgage and not included in closing costs above, but the PST on that premium ($1,824) must be paid upfront at closing.
Scenario 2: $800,000 Home in Toronto (Repeat Buyer, 20% Down)
| Closing Cost Item | Amount |
|---|---|
| Ontario Land Transfer Tax | $11,475 |
| Toronto Municipal Land Transfer Tax | $11,475 |
| First-Time Buyer Rebates | $0 |
| Net Land Transfer Tax | $22,950 |
| Legal Fees (incl. disbursements) | $1,500 |
| Title Insurance | $400 |
| Home Inspection | $600 |
| Appraisal Fee | $0 (covered by lender) |
| CMHC Insurance | $0 (20% down) |
| Closing Adjustments | $500 |
| Government Registration Fees | $200 |
| Moving Costs | $1,500 |
| Total Estimated Closing Costs | $27,650 |
For a repeat buyer, the land transfer tax alone is nearly $23,000. This example highlights how significantly the double land transfer tax impacts Toronto buyers. The total closing costs represent approximately 3.5% of the purchase price, which is squarely within the 1.5% to 4% range, but heavily weighted toward the upper end because of the double tax.
Scenario 3: $500,000 Home in Mississauga (First-Time Buyer, 10% Down)
| Closing Cost Item | Amount |
|---|---|
| Ontario Land Transfer Tax | $6,475 |
| Toronto Municipal Land Transfer Tax | $0 (outside Toronto) |
| First-Time Buyer Rebate (Ontario LTT) | -$4,000 |
| Net Land Transfer Tax | $2,475 |
| Legal Fees (incl. disbursements) | $1,300 |
| Title Insurance | $300 |
| Home Inspection | $500 |
| Appraisal Fee | $350 |
| PST on CMHC Insurance ($450K x 3.10% x 8%) | $1,116 |
| Closing Adjustments | $400 |
| Government Registration Fees | $200 |
| Moving Costs | $800 |
| Total Estimated Closing Costs | $7,441 |
The difference is stark. A first-time buyer in Mississauga pays roughly half the closing costs of a comparable purchase in Toronto, primarily because there is no Municipal Land Transfer Tax outside the City of Toronto. The net land transfer tax is only $2,475 compared to $8,475 for the Toronto first-time buyer in Scenario 1. If closing costs are a major concern, buying just outside Toronto's borders can save you thousands.
First-Time Buyer Savings: How Rebates Reduce Your Costs
First-time home buyers in Toronto have access to the most generous land transfer tax rebates in Ontario. Here's how to maximise your savings:
Ontario Land Transfer Tax Rebate:
- Worth up to $4,000
- Available to any first-time buyer purchasing a home anywhere in Ontario
- Fully eliminates the provincial LTT on homes up to approximately $368,000
- Partial rebate on homes above that threshold
Toronto Municipal Land Transfer Tax Rebate:
- Worth up to $4,475
- Available to first-time buyers purchasing within the City of Toronto
- Fully eliminates the municipal LTT on homes up to approximately $400,000
Combined maximum savings: $8,475
To qualify for these rebates, you must meet the following criteria:
- You must be at least 18 years old
- You must be a Canadian citizen or permanent resident
- You must not have owned a home (or an interest in a home) anywhere in the world at any time
- Your spouse cannot have owned a home while being your spouse
- You must occupy the property as your principal residence within nine months of purchase
If you're buying with a partner and only one of you qualifies as a first-time buyer, you'll receive a prorated rebate based on your ownership share. For example, if you own 50% and your partner owns 50%, you'll receive 50% of the maximum rebate.
Beyond land transfer tax rebates, first-time buyers may also benefit from the Home Buyers' Plan (HBP), which allows you to withdraw up to $60,000 from your RRSP tax-free to put toward your down payment, and the First Home Savings Account (FHSA), which combines features of the RRSP and TFSA specifically for first-time buyers. While these don't directly reduce closing costs, they free up cash that helps cover them.
Pre-Construction Closing Costs: What's Different
If you're purchasing a pre-construction condo in Toronto, the closing cost picture changes in several important ways. Pre-construction purchases come with unique fees and considerations that resale buyers don't face.
Occupancy Fees (Interim Occupancy Period)
When your pre-construction condo is ready to live in but the building hasn't yet been registered as a condominium, you'll enter an interim occupancy period. During this time, you pay monthly occupancy fees to the builder that typically include:
- Interest on the unpaid balance of the purchase price
- Estimated property taxes for your unit
- Estimated monthly maintenance fees
These fees can range from $1,500 to $3,000+ per month and are not applied to your mortgage. The interim occupancy period can last anywhere from a few months to over a year, so this is a significant cost to plan for.
HST on New Construction
New homes in Ontario are subject to the Harmonized Sales Tax (HST) of 13%. Most builders include the HST in the listed purchase price, but this is not always the case. Always confirm whether HST is included in the purchase price or on top of it.
Buyers may qualify for an HST rebate on new homes priced under $450,000, which can be worth up to approximately $24,000 (the combined federal and provincial new housing rebate). Many builders assign this rebate to themselves and factor it into the purchase price, so again, verify the specifics with your builder and lawyer.
Development Levies and Other Builder Charges
Pre-construction agreements may include clauses allowing the builder to pass along development charges, education levies, and utility connection fees. These can add $5,000 to $15,000+ to your closing costs. Review your Agreement of Purchase and Sale carefully and have your lawyer explain any capped or uncapped levy clauses.
Tarion Warranty Enrollment Fee
All new homes in Ontario must be enrolled in the Tarion Warranty Corporation's new home warranty program. The enrollment fee is typically paid by the builder, but some pass it on to the buyer. This fee ranges from approximately $600 to $1,200 depending on the home type.
Tips to Reduce Your Closing Costs in Toronto
While you can't eliminate closing costs entirely, there are several strategies to minimise them:
1. Stack Every First-Time Buyer Rebate Available
If you qualify as a first-time buyer, claim both the Ontario and Toronto land transfer tax rebates for up to $8,475 in savings. This is the single biggest lever you can pull to reduce closing costs. Make sure your lawyer applies for both rebates on your behalf at closing.
2. Shop Around for Legal Fees
Legal fees can vary by several hundred dollars from one firm to another. Get quotes from at least three real estate lawyers and compare their all-in costs, including disbursements. However, don't choose solely on price. Experience and responsiveness matter, especially if complications arise close to your closing date.
3. Ask Your Lender to Cover the Appraisal
Many lenders will waive the appraisal fee, especially for conventional mortgages. Some mortgage brokers can also negotiate this as part of your mortgage package. It's a small amount in the grand scheme, but every dollar counts when you're already stretching your budget.
4. Negotiate Your Mortgage Rate Down Instead of Accepting Cashback
Some lenders offer cashback incentives to help with closing costs, but these often come with higher interest rates. Run the numbers carefully. In most cases, a lower interest rate saves you far more over the life of the mortgage than a one-time cashback payment.
5. Consider Buying Just Outside Toronto
If you're flexible on location, buying in Mississauga, Vaughan, Markham, or other 905-area municipalities eliminates the Toronto Municipal Land Transfer Tax entirely. On a $700,000 purchase, that saves approximately $9,475 in land transfer tax (or $5,000 after the first-time buyer rebate).
6. Budget 3% to 4% of the Purchase Price
The best way to avoid being caught off guard is to budget conservatively. Setting aside 3% to 4% of your purchase price for closing costs ensures you won't be scrambling for funds at the last minute. On a $600,000 purchase, that means keeping $18,000 to $24,000 available beyond your down payment.
7. Time Your Closing Date Strategically
Closing at the beginning of the month can slightly reduce your closing adjustments, since you'll owe less in prorated property tax and condo fee reimbursements to the seller. This is a minor savings, but it's easy to implement if you have flexibility on your closing date.
Frequently Asked Questions
How much are closing costs in Toronto on a $500,000 condo?
On a $500,000 condo in Toronto, closing costs typically range from $10,000 to $18,000, depending on whether you're a first-time buyer and the size of your down payment. First-time buyers who claim both land transfer tax rebates can reduce their closing costs to roughly $10,000 to $12,000. Repeat buyers should budget closer to $16,000 to $18,000. The combined Ontario and Toronto land transfer taxes are the largest single cost, totalling approximately $12,950 before rebates.
Are closing costs in Toronto higher than other Ontario cities?
Yes, significantly. Toronto is the only city in Ontario that charges a Municipal Land Transfer Tax in addition to the provincial tax. This effectively doubles the land transfer tax portion of your closing costs. For a $700,000 home, a buyer in Mississauga or Hamilton would pay approximately $9,475 in land transfer tax, while a Toronto buyer would pay approximately $18,950 before rebates. All other closing costs (legal fees, title insurance, inspections) are similar across the GTA.
Can closing costs be added to my mortgage?
Generally, no. Closing costs must be paid from your own funds at the time of closing. The one exception is the CMHC mortgage insurance premium, which is typically added to your mortgage balance (though the PST on that premium must still be paid upfront). Some buyers use a line of credit or personal loan to cover closing costs, but this adds to your overall debt and can affect your mortgage qualification. The safest approach is to save for closing costs separately from your down payment.
Do I need a home inspection if I'm buying a new condo?
For a brand-new condo, a traditional home inspection is less critical since the unit is covered by the Tarion New Home Warranty. However, you should absolutely do a thorough pre-delivery inspection (PDI) before taking possession, documenting any defects or deficiencies. For resale condos, a home inspection of the unit is recommended to check plumbing, electrical, appliances, and any signs of water damage. While the condo corporation maintains the building's common elements, issues within your unit are your responsibility.
What happens if I don't have enough money for closing costs?
If you don't have sufficient funds for closing costs on your scheduled closing date, you may need to request an extension from the seller, which they are not obligated to grant. If you cannot close on time, the seller may be entitled to keep your deposit and pursue you for damages. This is why budgeting for closing costs early in the buying process is so important. Start by estimating 3% to 4% of your expected purchase price and save that amount in addition to your down payment.
Are there any closing costs that are tax-deductible?
For your principal residence, most closing costs are not tax-deductible. However, the land transfer tax is added to the cost base of your property, which can reduce capital gains tax if you ever sell it as a non-principal residence. For investment properties, many closing costs, including legal fees, appraisal fees, and mortgage insurance premiums, can be deducted as expenses or added to the adjusted cost base. Consult a tax professional for advice specific to your situation.
When do I actually pay closing costs?
Most closing costs are due on your closing date, which is the date specified in your Agreement of Purchase and Sale when ownership officially transfers. A few days before closing, your lawyer will provide a statement of adjustments showing the exact amount you need to bring. This amount includes the balance of the purchase price not covered by your mortgage, land transfer taxes, legal fees, and all adjustments. You'll typically provide these funds via certified cheque or bank draft to your lawyer's trust account one to two business days before closing.