Closing costs when purchasing a home

April 5, 2018 | Posted by: Sherry Corbitt

When you purchase a home, besides the actual purchase price you should budget for closing costs and post closing costs.

Common Closing Costs:

Land Transfer Tax

All provinces charge this tax every time a property changes hands and is based on the purchase price of the property. The amount varies by province.

For Ontario budget about 1% to 2% of the purchase price. Some municipalities (e.g. Toronto) also charge a separate Land Transfer Tax.

Title Insurance

Title insurance is often required by lenders to protect against losses in the event of a property ownership dispute such as encroachment issues, existing liens on the property, an undischarged mortgage and other issues related to the property’s previous owner.

This is purchased through your lawyer and will cost around $300.

Property Valuation / Appraisal

A recognized home appraiser provides a professional opinion confirming the market value of the property. This may be required by the lender funding the mortgage to determine whether the selling price is reasonable for the market.

An appraisal will usually cost between $350 to $400.

Home Inspection

A home inspector evaluates the structures and systems that make up the home and provide a written report. While not mandatory, most people will make a satisfactory home inspection a condition of the purchase of a resale home. A home inspection would not be required on a new build home.

A home inspection will cost around $500 depending on the complexity of the inspections.

Legal Fees

A lawyer is required when purchasing a home to provide services such as preparing a title deed, conducting various services, preparing documents to secure mortgage funding and disbursing funds. Ensure your lawyer’s quote includes all related expenses and disbursements, not just legal fees. Make sure your interests are protected by discussing your Offer to Purchase with your lawyer prior to signing. Budget around $2000 for legal fees.


Common Post Closing Costs:

Changing the locks

When you move into your new home you’ll want to change the exterior door locks for security. After all, you want only the people you choose to have the key to your new home. You can change the locks yourself or call a locksmith to do the job.


Both your old home and your new home should be given a thorough cleaning at moving time. Whether you’re buying cleaning supplies and doing it yourself, or hiring someone to clean for you, the costs can really add up.


You might want to re-paint, replace some light fixtures, refinish the floors, re-carpet, or do any number of other decorating tasks. Plan your budget and time frame for your decorating projects.


If your offer to purchase didn’t include appliances and if you don’t have your own, you will have to buy them when you move into your new home. Some appliances might have installation charges.

Tools and Equipment

When you own your own home, you can no longer call the landlord to do repairs. You’ll need to own some basic hand tools and possibly some gardening, lawn maintenance and snow clearing equipment.

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