- Closing costs are upfront fees paid on the closing date<\/li>
- It\u2019s smart to budget 2% to 4% of the purchase price for closing costs<\/li>
- The buyer pays the majority of closing costs, which may include legal fees, land transfer taxes, title insurance, and other administrative fees<\/li><\/ul>\n\n\n\n
What are Closing Costs?<\/h2>\n\n\n\n
Closing costs are upfront legal, administrative fees, and taxes associated with a real estate transaction. Closing costs are a separate expense that is not included in your down payment. Additionally, closing costs cannot be rolled into your mortgage payments<\/a> and must be paid upfront on the closing date.<\/p>\n\n\n\n
How Much Are Closing Costs?<\/h2>\n\n\n\n
![\"budget](\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2025\/02\/budgeting-closing-costs-1024x1024.png\")
<\/figure>\n\n\n\nThe exact amount you\u2019ll pay in closing costs varies significantly, depending on the home\u2019s purchase price, where you live, the real estate lawyer you choose, and the type of property you buy. <\/p>\n\n\n\n
The general rule of thumb is to budget 2% to 4% of the purchase price for closing costs. For example, if you plan to buy a home for $600,000, you should budget $12,000 to $24,000 for closing costs.<\/p>\n\n\n\n
Breakdown of Common Closing Costs in Canada<\/h2>\n\n\n\n
To better budget for closing costs, here are some common types of closing fees and their associated costs. Some types of closing costs are mandatory, but others may not apply to you, depending on the type of property you are buying.<\/p>\n\n\n\n
Legal Fees<\/h3>\n\n\n\n
A real estate lawyer completes the paperwork associated with buying and selling a home. For example, your lawyer will review the purchase agreement, perform a title search, calculate the land transfer tax, arrange for title insurance, and oversee the financial transaction to ensure all funds are properly distributed between the parties involved.<\/p>\n\n\n\n
Related content<\/p>
Canada First-Time Homebuyer Guide<\/a><\/p><\/section>\n\n\n\n
In addition, you will incur administrative costs associated with courier services, scanning, and printing documents. These legal and administrative fees can range from $900 to $2,000, depending on where you live.<\/p>\n\n\n\n
Registration Fees<\/h3>\n\n\n\n
Your real estate lawyer pays title and mortgage registration fees on your behalf. The specific fees vary by province.<\/p>\n\n\n\n
For example, in Ontario, you may have to pay:<\/p>\n\n\n\n
- Registration of Deed Transfer: $82.00<\/li>
- Registration of Mortgage: $82.00<\/li>
- Municipal Land Transfer Tax Processing Fee: $89.84<\/li><\/ul>\n\n\n\n
Land Transfer Tax <\/h3>\n\n\n\n
Land transfer tax (also known as property transfer tax in some regions) or an equivalent is applied when you buy a home in most Canadian provinces. The amount of land transfer tax is typically calculated as a percentage of the property\u2019s selling price.<\/p>\n\n\n\n
Each province sets its own marginal land transfer tax rates, and some municipalities set separate land transfer fees. However, you may be eligible for a land transfer tax rebate<\/a> if you are a first-time homebuyer. For example, in Ontario, the marginal land transfer tax rate is:<\/p>\n\n\n\n
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![\"buyer](\"https:\/\/www.zolo.ca\/blog\/wp-content\/uploads\/2025\/02\/what-are-closing-costs-1.png\")
<\/figure>\n\n\n\n