Let’s discuss the different closing costs you may encounter. Keep in mind that not all charges apply to all transactions. For example, if you are buying an older home then Tarion warranty fees and Condominium fees will not apply.
Land Transfer Tax: The amount is based on the purchase price of the property and is payable to the Ontario government. First-time home-buyers may be eligible for a rebate.
Municipal Land Transfer Tax (MLTT): In addition to the provincial land transfer tax, some municipalities in Ontario, like Toronto, have their own land transfer tax.
Legal Fees and Disbursements: You’ll need a real estate lawyer or notary to handle the legal aspects of the transaction. Legal fees cover their services, and disbursements include expenses like title searches and registrations.
Title Insurance: It’s often recommended to have title insurance to protect against issues related to the property’s title, such as fraud or errors in public records.
Home Inspection: While not mandatory, it’s advisable to have a home inspection to identify any potential issues with the property.
Appraisal Fee: If required by your lender, an appraisal fee covers the cost of determining the property’s market value.
Property Insurance: You’ll need to arrange for property insurance before closing to protect your investment.
Survey or Title Insurance (if no survey is available): If a recent property survey is not available, you may need to purchase title insurance to protect against boundary disputes.
Adjustments: You may need to reimburse the seller for prepaid property taxes, utility bills, or condo maintenance fees.
Home Warranty: Some new homes come with a warranty program, which may have associated costs.
Interest Adjustment: You may need to pay interest on your mortgage from the closing date to the first regular mortgage payment.
Tarion Warranty Fee: This fee applies to new homes and covers the cost of the Tarion Warranty Corporation’s warranty program.
HST or GST (if applicable): New homes are subject to HST or GST, which may be included in the purchase price or added on.
Real Estate Commission: Typically paid by the seller, but buyers should be aware of how it affects the overall transaction.
Moving Costs: Don’t forget to budget for the expenses associated with moving your belongings to the new home.
Utility Hook-Up Fees: There may be fees associated with setting up utilities in your name.
Condominium Fees: If you’re buying a condo, you’ll need to pay monthly maintenance fees.
It’s essential to work with a knowledgeable real estate agent and a legal professional to get a clear estimate of your specific closing costs. Keep in mind that some of these costs may be negotiable or shared between the buyer and seller, depending on the terms of the purchase agreement.
