What Are Closing Costs on a Condo in Toronto?
Whether you’re a first-time homebuyer, or seasoned investor, if you’re planning to purchase a condo in Toronto in 2025, it’s essential to understand the closing costs involved. These expenses, which are additional to the purchase price, can significantly impact your budget. This guide provides a comprehensive overview of typical closing costs, helping you prepare for a smooth transaction.
Understanding Closing Costs
When asking, what are closing costs on a condo in Toronto, they are fees and expenses paid at the final stage of a real estate transaction. In Toronto, these costs typically range from 1.5 percent to 4 percent of the condo’s purchase price . For a condo priced at $700,000, this translates to approximately $10,500 to $28,000.
Breakdown of Typical Closing Costs
1. Land Transfer Taxes (LTT)
Toronto buyers are subject to both provincial and municipal land transfer taxes:
- Ontario LTT: 0.5% on the first $55,000; 1% on $55,000–$250,000; 1.5% on $250,000–$400,000; 2% on $400,000–$2,000,000; 2.5% above $2,000,000.
- Toronto LTT: Mirrors the provincial rates, effectively doubling the tax burden.
For a $700,000 condo, combined LTTs can amount to approximately $20,950.
First-Time Homebuyer Rebates:
- Ontario: Up to $4,000
- Toronto: Up to $4,475
2. Legal Fees and Disbursements: What Are Closing Costs on a Condo in Toronto?
Hiring a real estate lawyer is mandatory in Ontario. Legal fees typically range from $1,100 to $1,800, depending on the complexity of the transaction. Disbursements, which include costs like title searches and registration fees, may add an additional $300 to $500.
3. Title Insurance
Title insurance protects against potential issues with the property’s title. This one-time fee usually ranges from $250 to $400 and is often included in the legal fees.
4. Property Appraisal
Lenders often require an appraisal to confirm the property’s value. Appraisal fees typically range from $400 to $500.
5. Home Inspection
While more common for houses, some condo buyers opt for inspections, especially condo townhomes. Costs range from $400 to $700, depending on the unit’s size and complexity.
6. CMHC Insurance Premium
Speaking of what are closing costs on a condo in Toronto, if your down payment is less than 20 percent, you’ll need mortgage default insurance through the Canada Mortgage and Housing Corporation (CMHC). Premiums vary based on the loan amount and are usually added to your mortgage.
7. Adjustments
Homebuyers may need to reimburse sellers for prepaid expenses, such as:
- Property Taxes: If the seller has prepaid taxes beyond the closing date.
- Condo Fees: Adjustments for monthly maintenance fees.
- Utilities: Pro-rated based on the closing date.
8. HST (Harmonized Sales Tax)
HST applies to new construction condos but not to resale units. Ensure you verify whether HST is included in the purchase price.
Additional Costs for Pre-Construction Condos
Purchasing a pre-construction condo can entail extra fees:
- Development Charges: Fees imposed by municipalities for infrastructure.
- Tarion Warranty Enrollment: Protection against construction defects.
- Utility Hook-Up Fees: Costs for connecting services like water and electricity.
These charges can add $20,000 to $30,000 or more to your closing costs.
Four Tips to Manage Closing Costs: What Are Closing Costs on a Condo in Toronto?
- Budget Accordingly: Allocate 1.5 percent to 4 percent of the purchase price for closing costs.
- Use Calculators: Online tools can provide estimates tailored to your situation.
- Consult Professionals: Engage with real estate agents and lawyers to understand all potential costs.
- Review Agreements Carefully: Ensure all fees are outlined in your purchase agreement.
Next Steps
Understanding and preparing for closing costs is crucial so you know upfront what are closing costs on a condo in Toronto. By familiarizing yourself with these expenses, you can budget effectively and avoid surprises.
Ready to Navigate Toronto’s Condo Market?
Whether you’re a first-time homebuyer or seasoned investor, Sean Mayers Real Estate is here to guide you through every step of the process. Contact me today for personalized assistance and expert advice to help you understand what are closing costs on a condo in Toronto.
