Closing Costs
Closing costs on a new home in Ontario usually add about 1.5% to 4% to the purchase price. They include land transfer tax, legal fees, title insurance, and, on new construction, builder adjustments such as utility connections, development charges and the Tarion warranty enrolment fee. This page explains each cost so there are no surprises on closing day.
Last updated: October 2026. Figures are general estimates. Your lawyer will give you the exact numbers before closing.
Ontario land transfer tax
Land transfer tax is the largest closing cost for most buyers. Ontario charges it in brackets on homes with one or two single-family residences:
| Portion of purchase price | Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 to $250,000 | 1.0% |
| $250,000 to $400,000 | 1.5% |
| $400,000 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
Examples: about $10,475 on a $700,000 home and about $16,475 on a $1,000,000 home. Eligible first-time buyers get a refund of up to $4,000. The projects on New-Home.ca are outside the City of Toronto, so there is no extra municipal land transfer tax.
Costs every buyer pays
- Legal fees and disbursements: your lawyer reviews the agreement, handles the mortgage and registers the title.
- Title insurance: a one-time premium arranged by your lawyer.
- Property tax and utility adjustments: your share of the year’s taxes and any prepaid amounts. New homes also get a supplementary tax bill after closing once the finished home is assessed.
- Sales tax on mortgage default insurance: if you put down less than 20%, Ontario’s 8% sales tax on the insurance premium is paid in cash at closing.
- Moving and setup: movers, window coverings and appliances if they aren’t included.
Extra costs on new construction
When you buy from a builder, the agreement of purchase and sale lets the builder charge certain “adjustments” on closing. They appear on the builder’s statement of adjustments and can add up to several thousand dollars or more. Common ones are:
- Tarion warranty enrolment fee: registers your home in Ontario’s new home warranty program. The fee is scaled to the purchase price.
- Utility connections and meters: hydro, water and gas meter installation and connection charges.
- Development charges and levies: municipal, regional and education charges. Many agreements pass on any increases imposed after you sign.
- Site work: items such as driveway paving, tree planting, grading or fencing, if your agreement allows them.
- Builder administration fees: for example, fees for processing deposit cheques or discharging the builder’s construction mortgage.
Tip: before you sign, ask for the adjustments to be listed with dollar amounts or caps. Caps on development charge increases and utility fees are often negotiable at launch, and your lawyer can enforce them at closing.
HST on new homes
Most builders quote prices with HST included, and you assign the standard new housing rebate to the builder. For agreements signed between April 1, 2026 and March 31, 2027, Ontario’s expanded HST relief can cover up to the full 13% on eligible new homes up to $1 million bought as a primary residence. Check in your agreement whether this relief is credited to you on closing or already built into the price. See our first-time buyer guide for details.
How to budget
For a pre-construction home, plan your cash in three parts:
- Deposit: often 10% of the price, paid over several months after signing.
- Balance of the down payment: due on closing if you’re putting down more than the deposit.
- Closing costs: about 1.5% to 4% of the price, depending on land transfer tax, your mortgage and the builder’s adjustments.
Closing cost questions
How much are closing costs on a new home in Ontario?
Plan for about 1.5% to 4% of the purchase price. On a $700,000 townhome that is roughly $10,500 to $28,000, with land transfer tax of about $10,475 the largest single item before any first-time buyer refund.
Are closing costs higher on new construction than resale?
Usually, yes. New homes add builder adjustments such as utility connections, development charges and the Tarion enrolment fee that resale buyers don’t pay.
Can closing costs go up after I sign?
Some can. Agreements often let builders pass on new or increased development charges. Ask for caps before signing, and have your lawyer review the adjustments section.
Want an estimate for a specific project? Contact UB Realty Inc., Brokerage or call 647-381-4000. This page is general information, not legal or tax advice.