Now that you’ve taken a glance at Part One of closing costs, you’re ready for Part Two of the closing costs when you’re purchasing real estate.
The following fees are due on closing:
Land Transfer Tax: this amount is based on the purchase price amount. In Ontario we have provincial tax, but in Toronto, we also have a Toronto Land Transfer tax. It should be noted that first time buyers get rebates for their first residential purchase.
Lawyer fees: typically these fees range from $1200 to $2000. Included in this amount is Title Insurance (I recommend you purchase).
The remainder of your downpayment: if you are planning on putting 20% down (the conventional mortgage amount here in Ontario), and you have given 5% as part of the deposit, on closing you will have to pay the additional 15%.
Closing adjustments: if the seller has prepaid any expenses, like taxes or maintenance fees, you will have to reimburse them for the time period they prepaid for after the sale.
HST: if you are buying a pre-construction property for investment purposes, you will owe HST on closing on top of the purchase price. Some, if not all of the HST, can be recovered if you have the property leased for at least a year. You have to file for reimbursement with the government.