Toronto Closing Costs: What You Pay on Top of the Down Payment

Quick answer: Closing costs are the cash you pay on top of the down payment, and in Toronto the biggest one is land transfer tax, charged twice: once by Ontario and once by the City. On a $1.1 million home that’s $18,475 to each, $36,950 in total. First-time buyers get up to $8,475 of it back. Then add legal fees, title insurance, adjustments and, if you put less than 20% down, Ontario sales tax on the mortgage insurance premium. None of it can go on the mortgage.

Most buyers save for the down payment and treat closing costs as a rounding error. In Toronto they aren’t. The land transfer taxes alone can be more than a third of a minimum down payment, and your lawyer needs the money in hand before closing day.

How are Toronto’s two land transfer taxes calculated?

Both taxes use the same marginal brackets on the purchase price for a home with one or two units, so up to $3 million the City’s tax equals the province’s (Ontario Ministry of Finance; City of Toronto):

Portion of the price	Rate (each tax)
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%
$2,000,000 to $3,000,000	2.5%

Above $3 million they split. Ontario stays at 2.5%, while Toronto’s municipal tax steps up to graduated luxury rates, starting at 4.4% on the portion from $3 million to $4 million (the rates in force since April 1, 2026).

Here’s what that works out to at common prices:

Purchase price	Ontario tax	Toronto tax	Total
$500,000	$6,475	$6,475	$12,950
$800,000	$12,475	$12,475	$24,950
$1,100,000	$18,475	$18,475	$36,950
$1,500,000	$26,475	$26,475	$52,950
$2,500,000	$48,975	$48,975	$97,950

The municipal tax only applies inside the City of Toronto. Buy in Mississauga, Vaughan or Markham and you pay the provincial tax alone.

What do first-time buyers get back?

Two separate rebates, each with the same strict test: you’ve never owned a home anywhere in the world, you’re a Canadian citizen or permanent resident, and you move in within nine months.

• Ontario refunds up to $4,000 of the provincial tax (Ontario).
• Toronto rebates up to $4,475 of the municipal tax, on resale and newly built homes (City of Toronto).

On a $650,000 first home, that turns $18,950 of land transfer tax into $10,475. Your lawyer can usually claim both when the transfer is registered, so you never pay the rebated part. Above about $400,000, the rebates are a fixed $8,475 off, not a percentage, so the saving stops growing as the price rises.

If you’ve ever owned, even years ago in another country, you don’t qualify. That’s stricter than the federal FHSA and Home Buyers’ Plan rules, and it catches people out.

What else goes into closing costs?

Cost	What it is	Amount
Ontario sales tax on the insurance premium	8% of the CMHC premium, only if you put less than 20% down	Cash at closing (CMHC)
Legal fees and disbursements	Your lawyer searches title, registers the transfer and mortgage, and moves the money	Get a written quote
Title insurance	Covers title defects and some fraud; lenders want it or a lawyer’s opinion on title	Part of your lawyer’s quote
Adjustments	Your share of property tax, condo fees or utilities the seller prepaid	Set on the statement of adjustments
Condo status certificate	The condo corporation’s finances, reserve fund and fees	Up to $100, tax in (O. Reg. 48/01, s. 18(4))
Home inspection	Optional, but skip it at your own risk	Get a quote

Ask your lawyer for a written estimate early, and ask what it leaves out. The statement of adjustments, which you see a few days before closing, is where the final number lands.

Two Toronto closings, worked through

These are example prices to show the arithmetic, not market averages.

	$650,000 condo, first-time buyer, minimum down	$1,100,000 house, repeat buyer, 20% down
Down payment	$40,000	$220,000
Ontario land transfer tax	$9,475 − $4,000 refund = $5,475	$18,475
Toronto land transfer tax	$9,475 − $4,475 rebate = $5,000	$18,475
CMHC premium (4.00% of $610,000)	$24,400, added to the mortgage	None
Ontario sales tax on the premium (8%)	$1,952	None
Status certificate	Up to $100	None
Cash so far	$52,527	$256,950
Still to add	Legal fees, title insurance, adjustments, moving	Same

The first-time buyer’s closing costs before legal fees add up to $12,527, about 31% of the down payment. For the repeat buyer, the two land transfer taxes add almost 17% to the cash they need on top of the 20% down.

When doesn’t this apply?

Newly built homes are a different closing. HST and new-home rebates come into it and builders often add their own adjustments, so have your lawyer review the builder’s schedule before you sign. Homes with three or more units are taxed differently above $2 million. If the home is outside the City of Toronto, ignore the municipal tax. And if you’re buying with someone who has owned before, ask your lawyer how that affects the rebates. The City’s rule, for one, also looks at a spouse’s ownership while married to you.

What should you do next?

Get a cash-to-close estimate on the price you’re actually shopping, before you make an offer, not after. I’ll run the land transfer taxes, any rebates, the insurance and sales tax, and the mortgage you qualify for, so you know how much you need in the bank. Book a 20-minute call with Joshua Tagg.

This is commentary, not advice. Figures as of October 13, 2026. Tax rates and rebates are set by the Province of Ontario and the City of Toronto and can change. All mortgages are subject to lender and insurer approval.