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What First-Time Home Buyers Need to Know About Closing Costs and Land Transfer Tax in Ontario
Buying your first home is exciting—but it’s important to understand that your down payment isn’t the only upfront cost - especially if you are eyeing Toronto.
What Are Closing Costs?
Closing costs are the fees you pay on top of your down payment when finalizing your home purchase.
In Ontario, these usually include:
- Land Transfer Tax (LTT) – Paid to the provincial government when you buy property.
- Legal Fees – Lawyers handle the title transfer, mortgage registration, and closing paperwork.
- Title Insurance – Protects against title fraud or errors.
- Home Inspection & Appraisal Fees – Often required by lenders.
- Property Tax Adjustments – If the seller prepaid property taxes, you’ll reimburse them.
Most buyers should budget 1.5%–4% of the purchase price for closing costs.
Land Transfer Tax in Ontario (and Toronto)
In Ontario, you pay a provincial Land Transfer Tax (LTT) based on the price of your home.
If you’re buying within the City of Toronto, there’s an additional municipal LTT—essentially doubling the tax.
Here’s a simplified example:
Home Price $600,000
Location Outside Toronto
Total LTT (Approx.) ~$8,475
Within Toronto ~$16,950 (Provincial + Municipal)
You can calculate this easily using Ontario Land Transfer Tax Calculator on our site.
First-Time Home Buyer Rebate
The good news? First-time home buyers in Ontario can receive a rebate of up to $4,000 on their provincial land transfer tax.
If your home is in Toronto, you can also get a Toronto municipal LTT rebate of up to $4,475, making your total possible savings up to $8,475.
To qualify, you (and your spouse, if applicable) must:
- Be a Canadian citizen or permanent resident
- Have never owned a home anywhere in the world
- Intend to use the property as your principal residence
Plan Ahead and Budget Smart
Knowing these costs ahead of time can help you avoid surprises. Use the calculators on our website to assist with this. For example, Dual Scenario Mortgage Calculator helps you compare and contrast different rates and terms and with the Closing Costs & Land Transfer Tax Calculator, you’ll get an instant estimate tailored to your city and determine whether you qualify for the first-time buyer rebate.
If you’d like help planning your purchase or understanding your qualification options, our team is happy to guide you through your first home journey - book a call.