Closing Costs When Buying a Home in Canada

Closing costs are the fees and taxes you pay around the purchase of a home, on top of the down payment.

By Promissory.ca Editorial Team Reviewed against official Canadian sources Last updated: 2026-09-16

What closing costs are

Buying a home involves two pots of money. One is the down payment, which reduces the mortgage. The other is closing costs, a collection of fees, taxes and adjustments that fall due around the closing date. Buyers who plan for the down payment but forget closing costs often find themselves short at the worst possible moment.

Closing costs vary by province, by property type and by the professionals you hire. Some are one time charges, while others are adjustments for costs the seller has already prepaid. The exact amounts depend on your situation, so treat any list as a checklist to price out, not a fixed bill.

Common closing costs at a glance

Land transfer tax

Land transfer tax is usually the largest closing cost after the down payment. It is charged by most provinces when a property changes hands, and some cities add their own municipal version. The amount is calculated on the purchase price using a tiered scale, so a more expensive home attracts more tax.

Rules differ from province to province, and some buyers qualify for rebates or exemptions, particularly first time buyers. Because the details change and are province specific, confirm the current rules for your province and municipality before you make an offer. This is one cost where a quick check can save real money.

Legal fees and disbursements

You will need a lawyer or notary to handle the legal side of the purchase. They search the title, prepare the transfer documents, register the mortgage and make sure the funds flow correctly on closing day. Their bill usually has two parts: a professional fee and disbursements, which are the out of pocket costs they pay on your behalf, such as registrations and searches.

Ask for an estimate in writing before you retain anyone. The range is wide, and a clear quote avoids surprises.

Title insurance

Title insurance is a one time premium that protects you against certain problems with the title to the property, such as fraud, survey issues or unknown liens. Lenders usually require it on a mortgage, and many buyers also take a policy that protects their own interest. It is a modest cost relative to the value it protects.

Appraisal and home inspection

The lender may require an appraisal to confirm the property is worth the price you are paying. The appraisal protects the lender, though you typically pay for it. A home inspection is different: it is for you, not the lender. An inspector reviews the condition of the home and reports on issues that may need repair. Skipping an inspection to save a fee can be a costly gamble, especially in an older home.

Adjustments

Adjustments are amounts you reimburse the seller for costs they have already paid but that cover a period after closing. If the seller prepaid the year property tax or the month condo fees, you owe them their share for the days you own the home. Adjustments can work in your favour too, if you are taking over costs the seller owes. Your lawyer calculates these and includes them in the final statement of adjustments.

Taxes on new homes

If you buy a newly built home, sales tax rules may apply. In Canada, GST or the harmonized sales tax can apply to new housing, with provincial variations and possible rebates depending on the province and the price. Resale homes are generally treated differently. Because the rules and rebates vary, confirm the treatment with your builder, your lawyer or the provincial authority before you sign a purchase agreement.

Moving and setup costs

The costs do not stop at the closing date. Movers, a truck rental, utility connection fees, changing your address, and the small purchases that make a house livable all add up. New homeowners often spend more in the first month than they expect on items like window coverings, a lawn mower or basic tools. Setting aside a modest fund for these costs keeps the first month from straining your budget.

Budgeting and timeline

1. Estimate each closing cost before you make an offer, using provincial and local rules.
2. Ask your lawyer for a written estimate of fees and disbursements.
3. Confirm whether the lender requires an appraisal and who pays for it.
4. Book a home inspection once your offer is accepted.
5. Ask your lawyer to estimate adjustments based on the seller prepaid costs.
6. Set aside a buffer for moving and first month setup expenses.
7. Have the funds liquid and ready before closing day.

Do not drain your emergency fund

It is tempting to pour every dollar into the down payment and closing costs. Resist the urge to empty your savings entirely. A home brings unexpected expenses, from a failed water heater to a leaky roof, and having no cushion means turning to high interest credit at the worst time. Keep an emergency fund separate from your closing funds, even if it means buying a slightly less expensive home.

Promissory.ca is not a lender or a mortgage broker and charges consumers no fee; it may receive compensation from lending partners. A licensed mortgage professional and a real estate lawyer can help you estimate the full cost of your purchase.