Guide
Closing costs on a new Ontario home, the full list
What will I actually pay at closing on a new construction home?
Budget 2% to 4% of the purchase price. On a $1.1 million freehold home outside Toronto expect $30,000 to $45,000: land transfer tax of about $18,475, development levies, utility connections, Tarion enrolment, legal fees and grading deposits. Inside Toronto add a second land transfer tax.
New construction closing costs are materially higher than resale, because a builder passes through a list of charges a private seller never bills you for. Here is the complete picture on a $1,100,000 freehold home.
Land transfer tax
Ontario’s marginal rates:
| Portion of price | Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 – $250,000 | 1.0% |
| $250,000 – $400,000 | 1.5% |
| $400,000 – $2,000,000 | 2.0% |
| Above $2,000,000 | 2.5% |
On $1,100,000 that is $18,475.
Inside the City of Toronto a municipal land transfer tax applies again on broadly similar bands, roughly doubling it to about $37,000. Most new low-rise is in the 905 (Vaughan, Markham, Brampton, Caledon, Oakville, Milton, Pickering, Whitby), so one tax rather than two. That is a real and under-discussed advantage.
First-time buyers: up to $4,000 provincially and up to $4,475 in Toronto, for up to $8,475 combined. Claimed by your lawyer at closing. Note the test is not identical to the federal GST rebate test, ask about each separately. More.
The builder’s adjustments
| Item | Typical |
|---|---|
| Development charges / levies | $5,000 – $20,000+ |
| Utility and service connections | $1,500 – $3,500 |
| Meter installations | $500 – $1,500 |
| Tarion enrolment | $600 – $1,500 |
| Grading / sodding / driveway deposits | $1,000 – $3,000 |
| Utility security deposits | $300 – $1,000 |
| Builder admin, document and legal fees | $1,000 – $3,000 |
| Prepaid property tax adjustment | varies |
Development charges are the one to control. Standard clauses pass municipal increases through to you with no ceiling, and on a closing three or four years out that is open-ended. Negotiate a cap, the most valuable amendment available.
Your own costs
| Item | Typical |
|---|---|
| Legal fees and disbursements | $2,500 – $4,000 |
| Title insurance | $400 – $900 |
| Home insurance (first payment) | $100 – $250 |
| Moving | $1,000 – $3,000 |
The totals
Outside Toronto: roughly $30,000 to $45,000. Inside Toronto: add about $18,000.
The two that can wreck the budget
A failed HST rebate. If your price was net of HST rebate and you do not qualify, spousal test, renting it out, not the first occupant, the builder bills the rebate amount at closing. Up to $80,000, in certified funds, on the day. This dwarfs everything above.
An appraisal shortfall. Not a closing cost, but due the same day. If the home appraises below your purchase price the gap is cash, and there is no exit. How this happens.
What nobody budgets
The exclusions from the base price: appliances, window coverings, fencing, rear landscaping, a deck. Commonly $25,000 to $60,000 in the first year.
The practical step
Ask your lawyer for an estimate of the statement of adjustments several months out. Most will produce one. The real statement often arrives a week or two before closing, not enough time to raise money. More.
Sources