First-Time Buyer Closing Costs, Explained

Saving the down payment is only half the battle. As a first-time buyer in Ontario, you also need closing costs — the one-time fees due when the home becomes yours. The good news: first-time buyers get rebates that wipe out a big chunk of the largest cost. Here's what to budget, line by line, and exactly what you can claim back.

Key takeaways

• Budget roughly 1.5%–4% of the purchase price for closing costs in Ontario.
• Land transfer tax is the biggest cost — but first-time buyers get rebates of up to $4,000 provincial and $4,475 in Toronto.
• A real estate lawyer is mandatory in Ontario; budget $1,100–$2,500.
• Closing costs are paid from your own funds, separate from the down payment.
• HOMEH gives eligible buyers the industry's highest Cashback Rebate — enough to cover closing costs many times over.

What counts as a closing cost?

Closing costs are the one-time fees you pay to finalize your purchase — taxes, legal work, and due-diligence checks that put the property in your name. They are separate from your down payment and paid from your own funds, so the cash needs to be ready before closing day.

As a rule of thumb, set aside 1.5% to 4% of the purchase price. Where you buy matters most: Toronto is the priciest because the city charges its own land transfer tax on top of the provincial one. For the full breakdown across every buyer type, see our pillar guide to closing costs in Ontario.

The big one: land transfer tax (and your rebate)

Land transfer tax (LTT) is almost always a first-time buyer's largest closing cost. Ontario charges a provincial LTT on every purchase, and if you buy in the City of Toronto you pay a second, municipal tax of roughly the same amount. The upside for first-timers: real rebates.

First-time buyer LTT rebates

First-time buyers get a provincial LTT rebate of up to $4,000, and Toronto first-time buyers get an additional municipal rebate of up to $4,475. Full details in our land transfer tax rebate guide.

The other closing costs

Beyond land transfer tax, nearly every Ontario buyer pays the costs below. A real estate lawyer is legally required to close a transaction in Ontario.

If your down payment is under 20%, you'll pay CMHC mortgage default insurance — and in Ontario, the 8% PST on that premium is due at closing. Learn more in our guide to CMHC mortgage insurance.

A sample first-time buyer budget

Here's how closing costs split out for a first-time buyer purchasing a $500,000 Toronto condo, after applying both LTT rebates. Notice how much the rebates shrink the land transfer tax line.

Don't forget adjustments and moving

On closing you also reimburse the seller for prepaid property taxes or utilities (called adjustments), plus moving costs. Add a small buffer on top of your core closing costs. See more first-timer pitfalls in our list of common first-time buyer mistakes.

How HOMEH covers your closing costs

Most closing costs are fixed by the government — but the commission side isn't. Eligible HOMEH buyers receive the industry's highest Cashback Rebate, which can cover your entire closing-cost budget and then some. Estimate yours with the closing cost calculator and the cashback calculator, then plan your whole purchase with the first-time home buyer guide for Ontario.