Most home buyers know how much they’ll expect to pay for a mortgage, but the financial commitment doesn’t stop there. Expenses like the land transfer tax, home insurance, legal fees, and PST on the mortgage insurance will all need to be calculated into the final cost of the home.
These necessary expenses can add up quickly, and without proper preparation, you might feel more financially overwhelmed than excited about your new home. Since many of these expenses need to be paid in cash on closing day, understanding the total upfront can help alleviate some of the financial stress associated with buying a home.
What Are Closing Costs?
If you’re a first-time home buyer, you’ve likely been saving for a down payment for several years. While the down payment is the largest expense on closing day, several other important expenses will need to be saved for too.
Each province has its own requirements and regulations, but generally, you’ll need to pay a land transfer tax in Ontario, Quebec, British Columbia, Manitoba, Nova Scotia, New Brunswick, and PEI, or a land title transfer fee in Alberta and Saskatchewan. Additionally, PST on mortgage insurance is applicable in Ontario, Quebec, and Saskatchewan, along with home insurance, title insurance, legal fees, and other miscellaneous fees such as the home inspection.
Check for City-Specific Requirements
Some cities also have specific requirements. For instance, in Toronto and Montreal, properties are subject to a municipal land transfer tax, which can significantly increase the amount of land transfer tax paid.
In Toronto, a home bought at the provincial average of $834,123 is subject to $13,157 in provincial land transfer tax and $13,157 in municipal land transfer tax, equalling a total of $26,315. A home bought at the same price in Guelph will only be subject to the provincial tax, meaning homeowners outside of Toronto can save $13,157 in land transfer taxes.
Here’s How First-Time Buyers Can Get Some Money Back
If you’re a first-time buyer, it’s always important to research ways to save money throughout the home-buying process. One such way is through the Land Transfer Tax Rebate which is available to first-time home buyers in Ontario.
First-time home buyers in Ontario may be eligible for a refund of up to $4,000, which may cover nearly all of the land transfer costs in some low-cost cities. Similarly, British Columbia, Prince Edward Island, and the City of Toronto provide land transfer tax rebates for eligible first-time home buyers.
Comparing Closing Costs Across Canadian Provinces
Although only 9.5% of home buyers are willing to relocate to a different province for affordability, the variation in closing costs could make some reconsider.
Using average home price data from CREA and home insurance estimates from Surex, Zoocasa calculated estimated closing costs for 2025 across Canada. The results indicate that buyers in British Columbia will pay the most in closing costs, estimated at an average of $99,435. This is $60,000 more than buyers in Nova Scotia, Manitoba, and Saskatchewan pay on average.
Closing costs tend to scale with the home price, as higher-priced homes generally lead to larger down payments, higher PST on mortgage insurance, and increased land transfer taxes, among other expenses. This puts British Columbia far above what other provinces pay on closing day.
Ontario buyers outside of Toronto will pay an average of $77,848 in closing costs, while buyers in the City of Toronto can expect to pay a few thousand dollars more due to municipal land transfer taxes. Outside of the down payment, the most significant expense for Ontario buyers is the $13,157 in land transfer taxes, followed by $2,482 in PST on mortgage insurance.
Those looking to save on land transfer tax can turn to Alberta and Saskatchewan, which do not have a land transfer tax but instead charge a more affordable land title transfer fee. This, combined with low average home prices, makes closing costs in Alberta and Saskatchewan noticeably smaller than in Ontario and British Columbia.
Still, even in the most affordable provinces closing costs can be upwards of $20,000. New Brunswick has the second-lowest average home price at $319,390, and the average cost to close is $23,566. Regardless of the province, prospective buyers must be financially prepared to handle these substantial expenses before they can receive the keys to their new home.
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