Real Estate · Canada

Closing Costs in Canada: The 1.5–4% Nobody Budgets For

Your down payment isn't the only cash you need on closing day. Canadian buyers typically pay another 1.5%–4% of the purchase price in closing costs — $10,500 to $28,000 on a $700,000 home — and lenders expect to see proof you have it. Here's where it goes.

The big one: land transfer tax

• Ontario: marginal bands from 0.5% to 2.5% — about $10,475 on $700,000. Buy in Toronto and the municipal LTT roughly doubles it (~$20,950 total).
• British Columbia: property transfer tax of 1% on the first $200k, 2% to $2M — about $12,000 on $700,000.
• Quebec: "welcome tax" (droits de mutation), roughly 1–1.5% at this price point.
• Alberta and Saskatchewan: no land transfer tax — only modest title registration fees. Same house price, thousands less to close.
• First-time buyer rebates: Ontario refunds up to $4,000, Toronto up to $4,475 on top, BC offers full exemption below set price thresholds. These rebates are the single biggest closing-cost lever for first-timers.

Everything else on the statement of adjustments

Item	Typical range
Legal fees and disbursements	$1,500 – $3,000
Title insurance	$250 – $500
Home inspection (before offer)	$400 – $700
Appraisal (often lender-paid)	$300 – $500
Property tax / utility adjustments	Prorated — often $500 – $2,000
PST/QST on mortgage default insurance premium	See below

The CMHC premium's hidden cash sting

Put down less than 20% and mortgage default insurance (CMHC, Sagen or Canada Guaranty) adds 2.8%–4% of the loan — on a $700,000 home with 10% down, roughly $19,500. The premium itself rolls into the mortgage, but in Ontario, Quebec, Manitoba and Saskatchewan the provincial sales tax on it cannot: Ontario's 8% PST on that premium is about $1,560 due in cash at closing. It surprises buyers every single year.

What the statement of adjustments actually contains

Closing costs in Canada typically run 1.5% to 4% of the purchase price, and almost none of it can be added to the mortgage — it is cash you need on completion day, on top of the down payment.

• Land transfer tax — the largest and most variable line. Nothing in Alberta or Saskatchewan, roughly $10,000 in Ontario on a median home, and about double that in Toronto, which charges a municipal tax on top of the provincial one.
• Legal fees and disbursements — commonly $1,500 to $2,500 including title searches and registration.
• Title insurance — a few hundred dollars, and effectively standard.
• Home inspection — $400 to $700, and the one line worth never skipping.
• Property tax and utility adjustments — reimbursing the seller for anything they have prepaid beyond the closing date.
• PST on CMHC insurance where applicable — payable in cash even though the premium itself is financed.

The CMHC premium and its cash sting

Below a 20% down payment, mortgage default insurance is mandatory at up to 4.00% of the loan. The premium itself is normally added to the mortgage, so it does not hit your closing-day cash — but in Ontario, Quebec, Saskatchewan and Manitoba the provincial sales tax on that premium is payable up front, and it surprises people. On a $632,000 insured loan the PST alone can exceed $2,000.

First-time buyer rebates worth claiming

Land transfer tax rebates are the largest offset available, and they are claimed at registration rather than refunded later — your lawyer normally applies them so the cash never leaves your account. Ontario offers up to $4,000, Toronto a further $4,475 on top, and British Columbia a full exemption below $500,000 with partial relief up to $860,000. Confirm your lawyer is applying them; a missed claim means a refund application months later.

Frequently asked questions

What are typical closing costs in Canada?
Commonly 1.5% to 4% of the purchase price, dominated by land transfer tax. Legal fees, title insurance, the home inspection and an appraisal make up most of the remainder.

How much is land transfer tax?
It varies enormously by province, from nothing in Alberta and Saskatchewan to substantial amounts in Ontario and British Columbia — and Toronto adds a second municipal charge on top of the provincial one, effectively doubling it. Several provinces offer a first-time buyer rebate.

Do I need mortgage default insurance?
With less than 20% down, CMHC or equivalent insurance is mandatory. The premium is a percentage of the loan that falls as the down payment rises, and it is usually added to the mortgage rather than paid upfront — so it is financed, with interest, over the full amortisation.

What costs are easy to forget?
GST or HST on a new build, the property tax and utility adjustments reimbursing the seller for what they have prepaid, and title insurance. On a new build the tax can be the single largest line after the price itself.

Sources

• Ontario Ministry of Finance — Land Transfer Tax rates and first-time buyer refund; City of Toronto MLTT
• BC Government — Property Transfer Tax and First Time Home Buyers' Program
• CMHC — mortgage loan insurance premium schedule; FCAC — closing cost guidance (budget 1.5–4%)

Figures as of June 2026; rates and rebate thresholds vary by province and city and change periodically — verify with the relevant provincial ministry. This is general information, not financial or legal advice.