CLOSING COSTS
Understanding Closing Costs
Common Closing Costs in Ontario
| Cost | Amount | Description |
|---|---|---|
| Title Search | $250–$400 | Ensures that clear title can be transferred. |
| Title Insurance | $500.00 | Protects the buyer from losses if the title has defects. |
| Land Transfer Tax | Province calculator link | Provincial tax due on title transfer. |
| Home Inspection | $500–$600 | Identifies issues before purchase. |
| Survey | $2,500–$4,000 | Confirms boundaries and structures. |
| Lawyers Fees | $1,500–$2,000 | Legal fees for closing. |
| Home Energy Audit | $350–$500 | Ensures energy compliance when selling. |
| Residential Appraisal Fee | $350–$500 | Confirms fair market value for lender. |
| Registration Fees | $160–$200 | Government fees to register title + mortgage. |
| Commercial AACI Appraisal Fee | $2,500–$5,000 | Required for commercial purchases. |
| Disbursements | $200–$250 | Lawyer's out-of-pocket costs (registrations, utilities). |
| Status Certificate (Condo) | $100–$200 | Condo documents (budget, rules, legal issues). |
What is a Latent Defect?
A latent defect is a hidden problem that cannot be found during a normal inspection. It may require invasive investigation that sellers typically do not allow.
If the seller or their agent knew of the defect and failed to disclose it, the buyer may have legal grounds for a claim. In Ontario, buyers have 2 years from discovering the defect to file a claim.
What Is a Patent Defect?
A patent defect is visible, obvious, or would be found during a standard home inspection.
Once a buyer waives their inspection condition, it is extremely difficult to request compensation for patent defects later.
Foundation Crack
Wall Damage
Moisture or Ceiling Damage
First – Time Home Buyers Incentives (2025)
New First – Time Buyer GST / HST Rebate (Federal)
Eliminates the 5% GST (federal HST portion) for first-time buyers on new or substantially renovated homes up to $1M.
Rebate is phased out linearly between $1M–$1.5M. Max rebate: $50,000.
Eligibility:
- Buyer must be a first-time homebuyer (no owned primary residence in current or prior 4 years).
- Agreements with builders must be signed May 27, 2025 – 2031.
- Owner-built homes must begin before 2031 and be substantially complete before 2036.
- Rebate legislation is proposed; administrative details pending.
Ontario Provincial HST Rebate
Covers the full 8% provincial portion of HST for first-time buyers (new or substantially renovated homes).
Applies up to $1M, phased out between $1M–$1.5M.
Existing Ontario New Housing Rebate also offers up to $24,000 separately.
Agreements must match federal timelines (May 27, 2025 onward).
Applies to qualifying new-build or substantially renovated homes.
Allows recovery of a portion of GST or federal HST.
Eligible for: builder-purchased homes, co-op shares, owner-built homes (with limits).
Additional First-Time Buyer Programs (Non-HST / Tax)
First Home Savings Account (FSHA)
Tax-deductible contributions, tax-free withdrawals for first home.
Home Buyers’ Plan (HBP)
Withdraw up to $35,000 per person from RRSP; 15-year repayment.
Home Buyer’s Tax Credit (HBTC)
One-time non-refundable tax credit up to $1,500.
What Lenders Look For
Credit score 650+ helps buyers access better rates.
Borrowing cannot exceed:
GDS Ratio
TDS Ratio
CMHC requires mortgage insurance for down payments under 20%.
Premium Rates:
80.01% – 85% LTV
2.80%
85.01% – 90% LTV
3.10%
90.01% – 95% LTV (traditional)
4.00%
90.01% – 95% LTV (non-traditional)