Closing Costs in Ontario for First-Time Home Buyers: A 2026 Guide

• by Admin
• May 09, 2026

Closing Costs in Ontario for First-Time Home Buyers: A 2026 Guide

The down payment is the number every first-time buyer in Ontario has memorised. The closing costs are the ones that catch them off guard at the lawyer's office two weeks before key day. They are not hidden — they are simply spread across three or four different government bills, an insurance product, a mortgage condition, and the legal file itself. Understanding the parts is what turns a stressful Friday into a smooth one.

This guide walks through what closing costs actually are in Ontario in 2026, which ones first-time buyers can reduce or eliminate, and what to look for on the lawyer's statement before you sign.

What "closing costs" actually means

Closing costs are the one-time amounts a buyer has to deliver, on top of the down payment, on the day a home in Ontario legally changes hands. They are paid through your real estate lawyer's trust account. None of them are part of the purchase price; all of them are real cash you need ready before closing.

For a first-time buyer in Ontario, the major categories are:

• Land Transfer Tax (provincial, and municipal in Toronto)
• Legal fees and disbursements
• Title insurance
• Property tax and utility adjustments owed to the seller
• Home inspection (paid earlier, before firm offer)
• Mortgage-related charges, including default insurance if the down payment is under twenty percent
• HST on a new build (almost never on a resale)

Each of these has its own rules, its own document, and — for first-time buyers — its own potential rebate or relief. Skipping any of them is what creates a last-minute scramble.

Land Transfer Tax: the largest line, and the one with a real rebate

Ontario charges Land Transfer Tax on every transfer of property in the province under the Land Transfer Tax Act. The amount is calculated against the purchase price using a tiered schedule. The Government of Ontario publishes the current rates and thresholds on the Land Transfer Tax page on ontario.ca — this is the authoritative source and the one your lawyer will use to calculate your bill.

The relief that matters for first-time buyers is the Ontario Land Transfer Tax refund for first-time homebuyers. To qualify, you must be at least eighteen, a Canadian citizen or permanent resident, occupy the home as your principal residence within nine months of registration, and have never owned a home anywhere in the world (the same test applies to any spouse during the marriage). When the rebate applies in full, the provincial Land Transfer Tax on the first portion of the purchase price is offset; for purchases above that threshold, the rebate is partial. The lawyer claims the rebate for you on closing through Teraview — there is no separate application.

If you are buying in Toronto rather than Brampton or another Ontario municipality, a separate Municipal Land Transfer Tax applies, with its own first-time buyer rebate. The City of Toronto publishes those rules at toronto.ca/MLTT. Most Brampton-area buyers do not encounter this charge unless they are buying in the City of Toronto.

Legal fees and disbursements

Your lawyer's account on closing has two parts. The fees are what the lawyer charges for the work — searching title, reviewing the agreement of purchase and sale, dealing with the mortgage lender, preparing closing documents, registering the transfer and mortgage, and reporting to the lender after closing. The disbursements are the third-party costs the lawyer pays on your behalf — Land Transfer Tax, Teraview registration charges, title search fees through ServiceOntario, courier charges, software fees, and the title insurance premium.

Both numbers should appear on the statement of adjustments and the trust ledger statement your lawyer sends before key day. Ask your lawyer to confirm them in writing as soon as the file opens, so there are no surprises in the closing week. If anything on the statement is unclear, that is the time to ask, not after the keys are in your hand.

Title insurance

Title insurance is a one-time premium that protects the buyer (and, on most files, the lender) against title defects, fraud, survey issues, certain municipal work-order problems, and other risks that can surface after closing. In Ontario, virtually every residential transaction closes with title insurance issued by Stewart Title or FCT (First Canadian Title) or another approved insurer. The premium is a disbursement; it is paid once and the policy lasts as long as you own the home.

Most first-time buyers find title insurance is the line they ask the most questions about, because it replaces a pre-2000s practice of obtaining a survey and having the lawyer issue an opinion on title. Talk to your lawyer about exactly what is and is not covered before closing.

Adjustments to the seller

On closing, the buyer reimburses the seller for costs the seller has prepaid past the closing date, and the seller credits the buyer for things the seller used past their billing cycle. Property taxes are the most common. If the seller has paid the year's installment in full and closing is mid-year, you owe them for the part of the year you will own the home. Utilities, condo fees on a condo purchase, and oil tank fill on a rural property work the same way. None of these are large in isolation; combined they can be a four-figure adjustment.

Your lawyer prepares the Statement of Adjustments and walks you through it. Read it carefully — math errors here are common and easy to miss.

Mortgage default insurance

If your down payment is less than twenty percent of the purchase price, federal rules require mortgage default insurance, almost always through CMHC, Sagen, or Canada Guaranty. The premium is a percentage of the mortgage amount that scales with the size of the down payment — it is not a closing cost in the strict sense because it is added to the mortgage and amortized over the life of the loan. What hits your closing day is the provincial sales tax (PST) on that premium in Ontario, which is paid in cash on closing rather than rolled into the mortgage. First-time buyers regularly forget this one.

What does and does not apply to a resale home

HST is the question I hear most often. On a resale home in Ontario — anything previously occupied — there is no HST on the purchase price. On a new-build home or a pre-construction condo, HST does apply, and a separate Ontario and federal HST New Housing Rebate may be available. The builder typically credits the rebate against the purchase price, but the math should be reviewed carefully by your lawyer because builder contracts vary.

Land transfer tax, however, applies to both resale and new homes equally.

Federal programs that still exist for first-time buyers

The federal First-Time Home Buyer Incentive (the shared-equity program) ended in March 2024. What remains for first-time buyers in 2026:

• The Home Buyers' Plan lets you withdraw a fixed maximum from your RRSP without immediate tax consequences, repayable over fifteen years. The withdrawal limit was increased in 2024.
• The First Home Savings Account (FHSA) is a registered account that combines RRSP-style deductions with TFSA-style tax-free withdrawals when used for a qualifying first home purchase.
• The federal Home Buyers' Tax Credit is claimed on your tax return for the year you buy, not on closing.

Your lawyer does not administer these — your accountant or financial advisor does — but they shape your overall cash position when planning the down payment.

A common mistake first-time buyers make

The mistake is treating closing costs as one number and asking only "how much extra do I need." That figure varies enough that any answer in dollars is misleading. The better approach is to walk through the categories above with your lawyer at the start of the file, get a written estimate for each, and confirm the final numbers a week before closing. Most files have one line that surprises someone — the PST on default insurance, the property tax adjustment in a year with reassessment, an HST issue on a new build — and most of those surprises are fixable when caught early, not on closing morning.

How a Brampton real estate lawyer fits in

The role of your real estate lawyer in Brampton or anywhere in Ontario on closing is to do four things: confirm you are getting clear and marketable title to the home you are buying, calculate every government and adjustment number on your statement of adjustments, register the transfer and mortgage on your behalf, and disburse funds at the right moment so keys can change hands. None of that should feel like a black box on closing day. If your lawyer is not walking you through the Statement of Adjustments line by line, you are not getting the service you are paying for.

If you are a first-time buyer in Brampton or anywhere in the GTA and want clarity on closing costs before you make an offer, book a free consultation with GS Arora Law and bring your draft agreement of purchase and sale.

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This article is general legal information about Ontario real estate law in 2026 and is not legal advice. For advice on your specific transaction, speak with a lawyer.

GS Arora, Lawyer & Notary Public. Brampton, Ontario.