Beyond your down payment and mortgage, closing costs typically run 2.5% to 4% of your purchase price—that’s $17,500 to $28,000 on a $700,000 home. Having a Toronto closing costs checklist helps you budget properly and avoid last-minute surprises. This guide breaks down every cost Toronto buyers actually pay, from mandatory fees to often-overlooked charges.
TL;DR: Toronto’s Hidden Home Buying Costs
Understanding the hidden costs when buying a house in Toronto prevents budget surprises and helps you close with confidence.
- Double land transfer tax: Toronto charges both provincial and municipal taxes (rebates available for first-time buyers)
- Legal fees plus disbursements: Budget $1,200 to $2,500 total for your real estate lawyer
- CMHC insurance PST: Ontario’s 8% tax on mortgage insurance must be paid in cash at closing
- Total closing costs: Expect 2.5% to 4% of purchase price, higher than surrounding GTA cities
Why Do Toronto Home Buyers Face Double the Costs?
Toronto stands alone in Ontario with its Municipal Land Transfer Tax, meaning buyers pay land transfer tax twice—once to the province and again to the city. Purchase in Mississauga, Vaughan, or Markham, and you only pay the provincial portion. Cross into Toronto (south of Steeles, between Etobicoke and Scarborough), and your closing costs nearly double.
This Toronto double land transfer tax adds up fast. On a $700,000 home, you’ll pay approximately $16,475 in combined land transfer taxes before rebates. The unexpected costs of buying a house in Toronto extend beyond just the doubled taxes—legal fees, title insurance, inspection costs, and Ontario-specific charges like CMHC insurance and PST all pile on. While GTA buyers outside Toronto budget 1.5% to 2.5% for closing costs, Toronto buyers need 2.5% to 4%. The significance of this municipal tax cannot be overstated—it makes up approximately 5% of the city’s annual budget [1], generating over $1 billion in peak years to fund municipal services.
Some buyers exploring options outside Toronto’s boundaries wonder about affordability and lifestyle in nearby cities. Questions like “Which is the best city to live in Toronto or what is the richest city in Toronto often arise when weighing closing cost differences against neighbourhood preferences. Even buyers considering more affordable GTA alternatives like is Barrie, Ontario, a safe place to live ultimately discover that Toronto’s cultural amenities, employment opportunities, and diverse communities often justify the higher costs for those planning to establish roots in Canada’s largest city.
What Are the 10 Hidden Costs When Buying a House in Toronto?
Every Toronto home purchase comes with expenses beyond your down payment. The hidden costs when buying a house in Toronto include mandatory fees, unexpected charges, and Toronto-specific taxes that buyers must pay on closing day. These ten costs represent what buyers actually face when navigating the city’s unique real estate market.
1. Double Land Transfer Tax (Provincial + MLTT)
The Municipal Land Transfer Tax Toronto charges sit on top of Ontario’s provincial land transfer tax, creating a double hit that catches buyers unprepared. Provincial rates climb from 0.5% on the first $55,000 up to 2.5% on amounts over $2 million. Toronto’s municipal rates mirror these percentages exactly. For a $600,000 home, you’ll pay roughly $14,950 in combined land transfer taxes. The good news? First-time home buyer hidden costs Toronto includes rebates up to $8,475 ($4,000 provincial plus $4,475 municipal), which significantly reduces this burden for eligible buyers.
2. Legal Fees and Disbursements
Your real estate lawyer handles everything from reviewing your purchase agreement to registering your title. When researching “legal fees buying a house Toronto,” you’ll find they typically range from $1,000 to $2,000 for the service itself. However, disbursements are separate costs. What do “disbursements lawyer Toronto real estate” transactions that you keep searching for online involve? These cover title searches, registration fees, courier costs, and document preparation. Disbursements add another $200 to $500 to your bill, bringing your total legal costs to $1,200 to $2,500. Always ask for an all-in quote to avoid surprises.
3. Title Insurance
Title insurance protects you against title fraud, survey issues, zoning violations, and other ownership problems that could surface years after purchase. This one-time premium costs $250 to $500 depending on your home’s value and stays in effect as long as you own the property. Many Toronto lawyers bundle title insurance into their services, but verify this coverage is included in your quote.
4. Home Inspection Costs
What’s the “cost of home inspection Toronto” buyers should expect? Inspections typically range from $350 to $600 for a standard residential property. While Toronto’s competitive market sometimes pressures buyers to waive inspections, this represents a false economy. A thorough inspection can reveal $10,000+ in needed repairs, giving you negotiating power or helping you avoid a money pit. Condo buyers should note that inspections focus on your unit since the building’s common elements fall under the corporation’s responsibility.
5. Appraisal Fees
Your mortgage lender requires an appraisal to confirm the property’s value matches your purchase price. The appraisal fee Toronto mortgage lenders require typically costs $300 to $600, though some lenders waive this cost to attract new clients. Professional appraisals for legal or estate purposes cost more—$700 to $1,500 in Toronto—but standard mortgage appraisals rarely exceed $600.
6. CMHC Insurance PST Ontario
If your down payment is less than 20%, you’ll need mortgage default insurance through CMHC, Sagen, or Canada Guaranty. The premium itself (2.8% to 4% of your mortgage amount) can be added to your mortgage. But here’s the catch: “CMHC insurance PST Ontario” charges—meaning the 8% provincial sales tax on your insurance premium—must be paid in cash at closing. On a $500,000 purchase with 5% down, that’s a $19,000 premium plus $1,520 PST due upfront—a cost many first-time buyers don’t anticipate.
7. Status Certificate Fee (Condos Only)
Condo buyers need a status certificate from the corporation, which costs up to $100 and must be provided within 10 days of request. What does the “Status Certificate fee condo Toronto” purchase include? This document covers critical information—the corporation’s financial health, reserve fund status, pending lawsuits, and whether the unit has unpaid fees. Your lawyer reviews this document carefully, as it can reveal red flags that affect your purchase decision or future resale value.
8. Closing Adjustments for Utilities and Taxes
Sellers prepay property taxes and utilities, so you’ll reimburse them for the portion covering your ownership period. What are “closing adjustments utility taxes Toronto” transactions? These are the prorated amounts your lawyers calculate that appear on your statement of adjustments, typically adding $500 to $2,000 to your closing costs depending on the time of year and property type. Annual property taxes get divided daily, while utility adjustments cover water, gas, and any prepaid services. Understanding how Toronto property taxes are explained and calculated helps you verify these adjustments are accurate on your closing statement.
9. Moving and Utility Set-Up Costs
Beyond the legal closing costs, moving and utility set-up costs Toronto residents face include hiring movers ($500 to $2,000), setting up hydro accounts, internet installation, and potential first-and-last-month deposits for utilities. Budget an additional $1,000 to $2,500 for these transition expenses. Toronto Hydro, Enbridge Gas, and major internet providers all require account setup, and some charge connection fees for new service.
10. Tarion Warranty Fee (New Construction Only)
Buying a new home or condo? The “new home warranty Tarion fee Ontario” mandate protects you against construction defects. This mandatory enrollment fee—paid at final closing, not at contract signing—ranges from approximately $570 plus HST for a $250,000 home to $920 plus HST for a $500,000 property. The fee increases with purchase price and provides coverage for one-, two-, and seven-year warranty periods on different aspects of your new home.
Cost Comparison: What Does a $700,000 Toronto Home Actually Cost?
| Cost Category | Typical Range | Toronto Example ($700K) |
| Land Transfer Tax (Double) | $14K-$17K | $16,475 |
| Legal Fees + Disbursements | $1,200-$2,500 | $1,800 |
| Title Insurance | $250-$500 | $350 |
| Home Inspection | $350-$600 | $500 |
| Appraisal | $300-$600 | $450 |
| CMHC PST (if <20% down) | Varies | $1,520* |
| Closing Adjustments | $500-$2,000 | $1,200 |
| Total Closing Costs | $17,500-$28,000 | $22,295 |
*Based on 5% down payment example
How Can You Budget for Hidden Costs in Toronto Real Estate?
When budgeting for hidden costs, you need careful financial planning beyond saving for your down payment. What is the total closing cost percentage in Toronto? Plan for 2.5% to 4% of your purchase price for resale homes, and potentially higher for new construction when Tarion fees and development charges apply. A $700,000 Toronto home requires $17,500 to $28,000 in closing costs beyond your down payment. Successfully budgeting for hidden costs in Toronto real estate means saving more than just the minimum down payment. Before committing to a purchase, consider what salary you need to live comfortably in Toronto while covering both your mortgage and these substantial closing costs.
Smart buyers start by requesting detailed quotes from real estate lawyers early in their house hunt. Ask for an itemized breakdown that includes both legal fees and disbursements—this prevents the sticker shock of unexpected charges on closing day. Consider using a Land Transfer Tax Toronto calculator to estimate your biggest cost accurately. Online calculators from the City of Toronto or major lenders show exactly what you’ll pay based on your purchase price.
First-Time Home Buyer Rebates and Savings
The first-time home buyer hidden costs Toronto buyers face can feel overwhelming, but rebates and strategic planning significantly reduce your burden. The Toronto FTHB Land Transfer Tax rebate can save you up to $8,475, making homeownership significantly more affordable. To qualify, you must be a Canadian citizen or permanent resident, be at least 18 years old, occupy the home within nine months, and have never owned a home while married to your current spouse. Both provincial and municipal rebates apply automatically through your lawyer when you meet the requirements.
First-time buyers should also explore options for reducing upfront costs. Some lenders waive appraisal fees for strong applicants. Shopping around for home inspection services can save $100 to $200. When researching the best Toronto neighbourhoods for first-time homebuyers, consider that areas like North York, Scarborough, or Etobicoke might offer slightly lower property tax adjustments compared to downtown Toronto, though all areas within city boundaries face the same double land transfer tax.
The financial reality is significant: according to CMHC’s 2025 Mortgage Consumer Survey [2], first-time homebuyers took an average of 3.4 years to save for their down payment. With intended down payments averaging 28% of the purchase price [3], that means Toronto buyers saving for a $700,000 home need to accumulate roughly $196,000—a substantial financial commitment that makes understanding and minimizing closing costs absolutely critical.
Make Your Toronto Home Purchase Smoother
The hidden costs when buying a house in Toronto don’t have to derail your homebuying dreams. Budget for these ten expenses from the start—especially that double land transfer tax—and you’ll avoid the cash crunch that surprises many buyers on closing day. Whether you’re eyeing a condo in Liberty Village or a detached home in Leslieville, understanding these costs helps you negotiate confidently and close successfully. If you’re wondering whether now is a good time to buy a house in Canada given current market conditions, factoring in these closing costs alongside your down payment provides a complete financial picture. To learn more about how to buy a property in Toronto and navigate each step with confidence, Nave Real Estate offers expert guidance tailored to Toronto’s market.offers expert guidance tailored to Toronto’s market.
FAQ
How much should I budget for closing costs in Toronto?
Can first-time buyers reduce Toronto’s high closing costs?
Do I pay closing costs separately from my down payment?
What closing costs are unique to Toronto versus other Ontario cities?
References
[1] Toronto Land Transfer Tax Revenue and Municipal Budget Data. WOWA.ca. https://wowa.ca/calculators/toronto-land-transfer-tax
[2] 2025 Mortgage Consumer Survey Results. Canada Mortgage and Housing Corporation (CMHC). https://www.cmhc-schl.gc.ca/observer/2025/a-fresh-look-at-canadas-mortgage-consumers
[3] GTA Home Sales and Average Price Expected to Increase Moderately in 2025. Toronto Regional Real Estate Board (TRREB). https://trreb.ca/gta-home-sales-and-average-price-expected-to-increase-moderately-in-2025/
