One of the most common budgeting mistakes buyers make is saving exactly enough for a down payment and forgetting that closing costs , often 1.5% to 4% of the purchase price , are due in cash on top of it. Here's exactly what to expect on both sides of a GTA real estate transaction in 2026.
Buyer Closing Costs
Land Transfer Tax (LTT)
Ontario charges a provincial land transfer tax on every purchase, calculated on a sliding scale based on price. Buyers in the City of Toronto pay a *second*, municipal land transfer tax on top of the provincial one. First-time buyers can offset much of this with rebates , see Ontario's official land transfer tax rebate page and our full first-time buyer programs guide.
Legal Fees & Disbursements
Budget roughly $1,500-$2,500 for a real estate lawyer to handle title search, mortgage registration, and closing, plus disbursements (title insurance, courier fees, registration fees).
Title Insurance
Typically $250-$400, protecting against title defects, fraud, or survey issues discovered after closing.
Home Inspection
$400-$700 depending on property size , optional but strongly recommended, especially for resale homes and anything with an older roof, furnace, or foundation.
Appraisal Fee
Often required by your lender, typically $300-$500 (sometimes covered by the lender directly).
Mortgage Default Insurance (if applicable)
Required for down payments under 20%, calculated as a percentage of the mortgage amount and usually added directly to the mortgage rather than paid in cash. CMHC's insurance premium details outline current rates.
Property Tax & Utility Adjustments
You'll reimburse the seller for any prepaid property taxes or utilities covering the period after your closing date.
GST/HST on New Construction
If you're buying new construction, GST (or the federal portion of HST) applies , though eligible first-time buyers can now access a substantial rebate under the new First-Time Home Buyers' GST/HST Rebate.
Moving Costs
Easy to forget, often $500-$3,000+ depending on distance and whether you hire professional movers.
Seller Closing Costs
Real Estate Commission
Typically the largest seller closing cost, usually a percentage of the sale price split between the listing and buyer's agent brokerages , negotiable and should be discussed upfront with your agent.
Legal Fees
Generally lower than a buyer's legal fees, but still budget $800-$1,500.
Mortgage Discharge Fee & Potential Prepayment Penalty
If you're breaking your mortgage before the end of its term, ask your lender for the exact penalty calculation , this can be substantial, particularly with fixed-rate mortgages broken well before maturity.
Status Certificate Fee (Condos)
Sellers of condo units are typically responsible for providing a status certificate to buyers, usually around $100-$150.
Home Preparation Costs
Staging, minor repairs, professional cleaning, and photography , not mandatory, but consistently linked to faster sales and stronger final prices in a balanced market. See our selling strategy guide for a full breakdown.
A Simple Rule of Thumb
Buyers should budget 1.5% to 4% of the purchase price for closing costs beyond the down payment (higher for Toronto due to the double land transfer tax). Sellers should budget commission plus roughly 1-2% for legal and incidental costs, before accounting for any mortgage discharge penalty.
Frequently Asked Questions
Are closing costs included in my mortgage?
No , with the exception of mortgage default insurance premiums, closing costs are generally due in cash on closing day and cannot be rolled into the mortgage.
How much extra should I budget as a first-time buyer in Toronto?
Because Toronto charges both provincial and municipal land transfer tax, first-time buyers should budget for the double tax, then apply for both available rebates , see our complete rebate guide.
Do sellers pay land transfer tax?
No , land transfer tax is a buyer-only cost in Ontario.
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*Want an exact closing cost estimate for your specific purchase or sale? Contact Hamodi Realty for a personalized cost breakdown.*