Estimating closing costs is an important step in a real estate transaction in Ontario. Closing costs are all the fees associated with buying or selling a home, such as land transfer taxes, legal fees, and title insurance. These costs can add up to thousands of dollars, so it pays to plan ahead and have a good understanding of how much you’ll be expected to pay.
At Beffa Law, in our real estate practice we are are transparent about our fees and additional costs, and our free quote tool will help you estimate the costs of your real estate transaction. This would cover most cases, however there are many possible scenarios and the costs in your case may be slightly different.
To find out what your Land Transfer Tax would be and receive a Free Quote, including potential discounts available to you, click the link below.
Closing Costs F.A.Q.
Although some costs of purchasing a home are obvious, there are additional hidden costs that you should be aware of prior to making your purchase so you are not blindsided. Here are some examples of extra costs of buying a home:
- Initial deposit
- Home inspector fee
- Appraisal costs
- Mortgage insurance
- Property survey
- Title insurance
- Land transfer tax
- Title registration fee
- Real estate agent’s commission
- Lawyer’s fees
- Moving expenses
Beffa Law is committed to providing clients with transparent information about estimates and expenses from the get-go. We do our best to ensure that all costs are accounted for upfront in a retainer agreement, so our customers can trust they’re going into any transaction informed and equipped!
The Ontario Land Transfer Tax (LTT) is a provincial tax paid by buyers of real estate in the province of Ontario. It is calculated as a percentage of the purchase price of the home, based on different tiers.
Exemptions under certain conditions may apply for first time home buyers purchasing a qualifying principal residence.
As of 2017, the tax is calculated as follows:
- Amount up to $55,000 at 0.5%;
- Amount from $55,000 to $250,000 at 1.0%;
- Amount from $250,000 to $400,000 at 1.5%;
- Amount over $400,000 at 2.0%;
- Any amount over $2,000,000 at 2.5%.
The Toronto Land Transfer Tax (TLTT) is a municipal tax imposed upon buyers of real estate properties located within the City of Toronto. It applies to all transfers registered on or after February 1, 2008 and must be paid at the time of registration. The TLTT rate is calculated as a percentage of the purchase price, with different tiers depending on whether it is a residential, commercial or mixed-use property.
If you are a first time home buyer in Ontario, you can qualify for a Land Transfer Tax Rebate. You should be aware that the maximum rebate amount is $4000 even if the total land transfer tax is more than this amount. The rebate is also applied to the property once, even if two individuals who are first-time home buyers are purchasing the home together.
When purchasing a home you may sometimes need to, or choose to obtain title insurance. The term title indicates your legal ownership of the property and title insurance protects this status in the case there is a defect with the title. Although rare, the deed to the property may be fraudulent or incorrect which would raise concerns about your ownership of the property.
Title insurance, however, should not be confused with home insurance which provides coverage for your physical home and its contents.