Closing Costs When Buying Your First Home in Canada: The Complete Newcomer Breakdown (2026)

Not financial advice. For educational purposes only.

Most newcomers spend months — sometimes years — saving for a down payment. Then, a week or two before they get the keys, their lawyer sends a statement asking for several thousand dollars more. These are your closing costs, and they catch a huge number of first-time buyers off guard, because nobody talks about them until the money is due.

Closing costs are the fees, taxes, and adjustments you pay to legally transfer a home into your name — and they land on top of your down payment. The good news: almost every one of them is predictable. Once you know what they are, you can budget for them with no surprises. This guide walks through each line item, tells you which are fixed and which vary, and shows you where to get exact numbers for your own purchase.

How Much Are Closing Costs in Canada?

A useful planning rule of thumb is to set aside roughly 1.5% to 4% of the purchase price for closing costs. Where you land in that range depends mostly on three things: your province (land transfer tax varies a lot), whether you qualify for first-time buyer rebates, and whether you're buying a resale home or a brand-new build.

That range is a starting point for budgeting, not a quote. The single biggest swing factor is land transfer tax, which is set by your province and, in some cities, by the municipality on top. The most reliable way to get a real number for your situation is to run it through the Maple Syrup Money closing-costs calculator, which totals the major line items for you based on your price, province, and down payment.

Down payment vs. closing costs — they are not the same thing. Your down payment goes toward the price of the home; it becomes your equity. Closing costs are separate money that goes to the government, your lawyer, and various service providers. You need both, and your lender will want to see that you have the closing costs available in addition to your down payment before they finalize your mortgage. If you're still working out how much down payment you need, our guide on mortgages for newcomers: PR vs. work permit covers the down-payment rules in detail.

The Closing-Cost Line Items, One by One

Here is where the money actually goes. I've grouped them from largest and least avoidable down to the smaller ones.

1. Land Transfer Tax (usually the biggest single cost)

Almost every province charges a land transfer tax (LTT) when a property changes hands — a percentage of the purchase price, calculated on a sliding scale. It's paid at closing, by you, and it cannot be added to your mortgage. This is typically the largest closing cost by far.

A few things newcomers need to know:

• Some cities charge a second, municipal land transfer tax on top of the provincial one. Toronto is the best-known example — buying inside the city limits effectively doubles the land-transfer bill compared with buying just outside it.
• First-time home buyer rebates can wipe out part or all of it. Ontario offers a first-time buyer refund of up to $4,000, and the City of Toronto offers its own municipal rebate of up to $4,475. British Columbia and Prince Edward Island offer full or partial exemptions under certain price thresholds. These are set in provincial and municipal legislation and are worth confirming for your province, because they can save you thousands.
• Alberta and Saskatchewan don't charge land transfer tax — instead they levy smaller title-registration and mortgage-registration fees, which are far cheaper.

Because the rates and rebates differ so much by location, don't guess. Use the Maple Syrup Money land transfer tax calculator to see the exact amount — and any rebate you qualify for — in your province and city.

2. CMHC Mortgage Default Insurance (if your down payment is under 20%)

If your down payment is less than 20% of the purchase price, your mortgage is legally required to carry mortgage default insurance (from CMHC or a private insurer like Sagen or Canada Guaranty). The premium is a percentage of your loan amount, and it's set on a fixed published schedule based on how much you put down:

Down payment	Loan-to-value	Insurance premium
5% to 9.99%	up to 95%	4.00% of the loan
10% to 14.99%	up to 90%	3.10% of the loan
15% to 19.99%	up to 85%	2.80% of the loan
20% or more	80% or less	No premium

Here's the part that trips people up: the premium itself is normally added to your mortgage (so it's not out-of-pocket at closing) — but the provincial sales tax on that premium is not. In Ontario, Quebec, Saskatchewan, and Manitoba, you pay PST/QST on the insurance premium in cash at closing. It's a real closing cost, and it surprises almost everyone.

For a full walk-through of how the premium is calculated and when it's worth putting down more, see our dedicated guide, CMHC mortgage insurance in Canada explained, or run the numbers in the CMHC insurance calculator.

3. Legal Fees and Disbursements

You need a real estate lawyer (or, in some provinces, a notary) to close a purchase in Canada. Your lawyer:

• reviews the contract and mortgage documents,
• searches title and registers the transfer,
• handles the money moving between you, the seller, and the lender, and
• confirms there are no liens or claims against the property.

You'll pay their legal fee plus disbursements — the out-of-pocket costs they incur on your behalf (title search, registration fees, courier, software charges, and so on). Fees vary by lawyer and by how complex the deal is, so get a quote up front and ask whether it's all-in. This is usually one of the larger line items after land transfer tax.

4. Title Insurance

Title insurance is a one-time premium that protects you (and your lender) against problems with the property's legal ownership — things like fraud, survey errors, unknown liens, or a previous owner's unpaid work. Most lenders require a lender's policy, and it's standard practice to add an owner's policy for yourself at the same time. Your lawyer arranges it, and it's a one-time cost paid at closing, not a recurring bill.

5. Home Inspection

A home inspection is optional, but skipping it to save money is one of the most common — and most expensive — mistakes a first-time buyer can make. An inspector examines the roof, foundation, wiring, plumbing, heating, and more, and gives you a written report before you're locked in. Budget a few hundred dollars for it. If it uncovers a serious problem, it can save you many times its cost — or give you room to renegotiate.

6. Property Appraisal

Your lender may require an appraisal to confirm the home is worth what you've agreed to pay before they hand over the mortgage money. Sometimes the lender covers it; sometimes you do. On an insured mortgage (under 20% down), the insurer often waives it. Ask your lender or broker whether an appraisal fee applies to you.

7. Adjustments (Prepaid Costs)

At closing, your lawyer settles up any costs the seller has prepaid past your closing date. The most common is property tax: if the seller already paid the year's property tax, you reimburse them for the portion covering the days you'll own the home. The same can apply to prepaid utilities, heating oil left in the tank, or — for a condo — prepaid maintenance/condo fees. These "adjustments" are usually modest, but they're real cash due at closing.

8. Sales Tax on New Builds

If you're buying a brand-new home from a builder (not a resale), GST or HST usually applies to the purchase price — resale homes are generally exempt. There are new-home buyer rebates that reduce this, and the rules and thresholds have been changing, so if you're considering a new build, confirm the current GST/HST rebate rules for your situation with your builder and lawyer before you sign. This is one line item where getting professional confirmation is worth it.

9. The Small-but-Real Extras

A handful of smaller items round out the list:

• Home insurance — your lender requires a policy to be in place before closing (your first premium or binder).
• Mortgage default insurance application/processing on some lender or insurer setups.
• Property survey (or a title-insurance substitute for one).
• Moving costs, utility hook-ups, and any immediate repairs — not technically "closing" costs, but they hit your bank account the same week, so budget for them.

A Newcomer-Specific Note Before You Shop

Two things that are easy to miss if Canada is new to you:

1. Your immigration status can affect your down payment, not usually your closing costs. Permanent residents are generally treated like citizens by lenders. Work-permit holders can absolutely buy — but some lenders ask for a larger minimum down payment, and rules around non-residents purchasing residential property have changed in recent years (permanent residents are exempt, and many work-permit holders qualify under exemptions). Confirm your eligibility and your specific down-payment requirement early. Our PR vs. work permit mortgage guide breaks this down.
2. Money you saved in your FHSA or through the RRSP Home Buyers' Plan is for your down payment — keep your closing-cost cash separate. It's easy to pour every dollar into the down payment and then come up short at closing. Ring-fence your 1.5%–4% cushion in a separate account so it's untouched when the lawyer's statement arrives. If you haven't set up those accounts yet, start with our FHSA for newcomers guide.

How to Budget for Closing Costs (a Simple Approach)

1. Estimate the total. Start with the 1.5%–4% rule of thumb on your target price, then refine it with the closing-costs calculator.
2. Nail down the big one. Land transfer tax is the swing factor — run the land transfer tax calculator for your province and city, and check for a first-time buyer rebate.
3. Add the PST-on-premium line if you're under 20% down and in Ontario, Quebec, Saskatchewan, or Manitoba.
4. Get real quotes for legal fees and home inspection — these are the two you can shop around for.
5. Keep the cushion separate from your down payment so it's ready on closing day.

Quick Closing-Cost Checklist

• Land transfer tax (provincial + municipal, minus first-time buyer rebate)
• PST/QST on the CMHC premium (if under 20% down, in ON/QC/SK/MB)
• Legal fees + disbursements
• Title insurance
• Home inspection
• Appraisal fee (if your lender charges one)
• Property tax / utility / condo-fee adjustments
• GST/HST (new builds only, minus any rebate)
• Home insurance binder
• Moving, hook-ups, immediate repairs

Closing costs feel intimidating only because they're hidden until the end. Bring them into the light early, budget the 1.5%–4% cushion from day one, and closing day becomes a formality instead of a scramble.

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Ready to see your real numbers? Run your purchase through the free Maple Syrup Money residential calculators — closing costs, land transfer tax, CMHC insurance, mortgage payment, and affordability, all in one place. And for the full home-buying journey from savings to keys, start with our step-by-step first-home guide.

The figures in this article that are cited as specific amounts (CMHC premium percentages, first-time buyer rebate maximums, minimum down-payment rules) reflect statutory and published schedules from CMHC and provincial legislation and can change. Rebate eligibility, sales-tax rules on new builds, and lender requirements vary by situation. This article is educational and is not financial, tax, or legal advice — confirm the details for your own purchase with your lawyer, mortgage broker, and a qualified professional.