In Ontario, as with most provinces in Canada, it is customary for the home buyer to pay the majority of the closing costs. Typically, the lender will reimburse you for the appraisal fee (which may range from $250 to $350). This covers things like legal expenses, land transfer tax, and home inspection costs.

However, it is important to note that these costs are negotiable and can be paid by either the buyer or the seller depending on what is agreed upon during negotiations.

To make things easier, it’s important to understand the steps involved in real estate purchases. One of them is the costs associated with closing the deal. In this article, our real estate lawyer from GK Law will take an in-depth look at the various expenses you’ll have to deal with to complete your home purchase.

Closing Costs Calculator 2023 Canada

Closing costs encapsulate a spectrum of fees and charges that arise in the orchestration of transferring property ownership. They burgeon from legal fees, land transfer tax, appraisal and home inspection costs, to title insurance, and more. The onus predominantly falls on the buyer’s shoulders, yet the door for negotiation with the seller often remains ajar, creating a window for a shared financial endeavor.

Use our calculator for a detailed estimate of your legal fees.

The Negotiation Landscape

Ontario’s real estate negotiation tableau extends an invitation for discourse between the buyer and the seller on the allocation of certain closing costs. A facet of negotiations could entail a buyer’s proposition for the inclusion of closing costs within the overarching purchase price, thereby sharing the financial load with the seller​1​. Additionally, the path of negotiation may also meander towards lenders, where a robust financial standing and a commendable credit history could unlock a willingness on the lender’s part to negotiate closing costs​2​.

Provincial Sales Tax on CMHC Premium

A down payment shy of 20% beckons the necessity for Mortgage Default Insurance from entities like CMHC or Genworth Canada. Though the premium melds into the mortgage, an additional responsibility blooms for the buyer in covering the provincial sales tax on the premium.

Appraisal Fee Reimbursement

The appraisal fee, a key to unlocking the lender’s assurance on the property’s market value, typically finds reimbursement from the lender, offering a sigh of financial relief for the buyer.

Land Transfer Tax

The realm of closing costs also harbors the land transfer tax, a levy by the provincial echelons. Its calculation in Ontario adheres to a tiered structure, resonating at 1.5% of the purchase price for abodes priced under $400,000, and escalating to 2% for those exceeding this marker. A silver lining emerges for first-time homebuyers, who may find themselves eligible for a rebate, significantly alleviating their financial load on this front.

Legal Guardianship

The tapestry of legal intricacies intertwined in property transactions necessitates the engagement of a real estate lawyer. The ensuing legal fees, though primarily a buyer’s responsibility, stand as a pivotal chapter in the narrative of closing costs.

The Digital Compass: Closing Costs Calculator

A Closing Costs Calculator emerges as a digital compass, offering a detailed forecast of legal fees and other intertwined costs. This tool, a beacon for both buyers and sellers, elucidates the financial landscape lying ahead, fostering informed decision-making.

The Rural Spectrum

Venturing into the rural spectrum unveils additional costs like septic tank and well inspection fees, and water and sewer connection fees. The buyer usually navigates these financial streams, though the costs may vary with the municipal tapestry.

Concluding Notes

Closing costs in Ontario, a significant act in the real estate play, predominantly cast the buyer in a leading role. However, the script may unveil scenes of negotiation, offering a more balanced financial narrative. Understanding the structure and negotiability of these costs lays down a pathway towards informed, judicious decisions, propelling a smoother voyage towards property ownership in Ontario.