Buying a home is an exciting milestone, but it’s essential to budget for more than just the purchase price. In Ontario, closing costs typically range from 1.5% to 4% of the property price, covering necessary legal and administrative fees. Let’s break down what you should expect when closing on a home in Whitby, Oshawa, and across the Durham Region.
Common Closing Costs in Ontario
Land Transfer Tax (LTT)
The most significant closing cost for buyers is the Land Transfer Tax (LTT), calculated based on the home’s purchase price. First-time homebuyers may qualify for a rebate of up to $4,000 to offset this cost. However, if you’re purchasing in Toronto, be aware that there is an additional Municipal Land Transfer Tax (MLTT), which effectively doubles the total LTT.
Legal Fees & Disbursements
A real estate lawyer is crucial for handling paperwork, reviewing contracts, and ensuring a smooth transaction. Expect to pay between $1,500 – $2,500 for legal fees, which typically include disbursements (costs incurred by the lawyer, such as title searches and document registration).
Title Insurance
Title insurance protects homeowners against title fraud, ownership disputes, or unforeseen claims on the property. While optional, most buyers opt for it as an added security measure. Title insurance usually costs between $250 – $400.
Home Inspection (If Applicable)
A home inspection isn’t mandatory but is highly recommended, especially for resale homes. A qualified inspector can identify potential issues with the property’s structure, electrical, plumbing, or HVAC systems. The cost of a home inspection typically falls between $300 – $600.
Property Tax & Utility Adjustments
If the seller has prepaid property taxes, utilities, or condo fees beyond the closing date, the buyer must reimburse them for their share. These adjustments vary depending on the home’s location, tax rates, and the closing date.
Mortgage Insurance (If Applicable)
Buyers with a down payment of less than 20% are required to purchase mortgage insurance through the Canada Mortgage and Housing Corporation (CMHC). The insurance premium is added to your mortgage, but the PST portion (8%) must be paid upfront in Ontario.
Moving Costs & Miscellaneous Expenses
Moving expenses can vary significantly depending on distance and whether you hire professional movers. Costs can range from $500 to $2,500. Additional expenses include changing locks, setting up utilities, and potential home improvements after moving in.
Example Closing Cost Estimates Based on Home Price
| Home Price | Estimated Closing Costs (1.5% - 4%) |
|---|---|
| $500,000 | $7,500 – $20,000 |
| $800,000 | $12,000 – $32,000 |
| $1,200,000 | $18,000 – $48,000 |
Final Thoughts
Closing costs are an essential part of home buying and should be factored into your budget from the start. Whether you’re purchasing in Whitby, Oshawa, or anywhere in the Durham Region, planning ahead for these expenses ensures a smoother transaction and prevents financial surprises.
At Team Prata, we are dedicated to guiding you through every step of the home-buying process. If you're looking for expert advice, market insights, or personalized support, reach out to us today. Let’s make your real estate journey seamless and successful—Welcome Home with Team Prata!