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One of the most common questions regarding Purchasing and Selling Real Estate is what 

are the costs involve. Below is brief summary of expenses incurred, when transactions 

are handled properly and professionally. Buyers should budget approximately 2-3% of the 

purchase price for closing costs. 

Land Transfer Tax


This is paid by the Buyer on the date of final closing to the Treasurer of Ontario pursuant 

to the Land Transfer Tax Act. The tax is based on the purchase price and the current rates 

became effective on June 1st,1989. 

The rates are as follows for a single family residence: 

$0-$55,000 0.5% 

$55,001-$250,000  1% less $275.00

$250,001-$400,000 1.5% less $1525.00 

$400,001 - and up 2.0% less $3525.00 

Example: To calculate the land transfer tax on a purchase price of $350,000, multiply the 

purchase price by 1.5% and deduct $1,525 ($5,250 - $1,525 = $3725) 

Disbursements – Purchase

Buyers are responsible to pay for certain disbursements carried out by their lawyer in 

respect of various searches, certificates, and registrations. Approximate examples of 

disbursements are ....

1) Registration of Deed $75 

2) Registration of Mortgage $75

3) Municipal and utility searches OR title insurance $270.00

4) Abstract of Title & Execution Certificate $150.00

5) Transaction Levy $50.00 

6) Couriers, photocopies, postage, closing agent $75.00 

For a typical purchase (including one mortgage), a Buyer should budget about $650.00 for 

disbursements. There will also be further costs for land transfer tax, adjustments, and legal 

fees. 

Note: All Costs are approximate and for guidance only. 

Title Insurance


Title insurance insures against past problems that could affect your ownership in the future. 

A low, one-time premium covers you for loss or damage up to the policy amount and all 

legal costs you would have to pay to defend your title. Once the policy is issued, a covered 

title problem is not your concern. It’s the Insurance Companies as they will assume the risk. 

No survey is required by your lending institution if you have title insurance. Note: The cost 

of title insurance is not having to pay the majority of the above noted disbursements. It is 

highly recommended that all purchasers obtain title insurance! Your Lawyer should discuss 

Title Insurance with you.

Disbursements– Sale


The Seller in a real estate transaction is not required to pay any Land Transfer Tax. The 

Seller is however responsible to pay for certain disbursements incurred by their lawyer. 

Approximate examples of disbursements are ....

Registration of a Discharge of Mortgage $50.00 

Transaction Levy $50.00

Couriers, photocopies, postage, closing agent $75.00 

For a typical sale (one mortgage to discharge), a Seller should budget about $175.00 for 

disbursements. 

There will also be further costs for adjustments and legal fees. Adjustments on Closing 

Between Seller and Buyer will be adjusted to the sale price and will appear on a Statement 

of Adjustments as credits in favor of the Seller or the Buyer. Examples of common 

adjustments are....

Taxes, if taxes for the calendar year are $2,400.00, the deal closes June 30th and the 

Seller has paid the taxes for the entire calendar year, there will a credit on closing to the 

Seller of $1,200.00. In other words, the Seller receives $1,200.00 more and the Buyer pays 

$1,200.00 more.

Propane, if the property had a propane tank, the Seller is usually asked to fill the tank on 

closing and sells a full tank to the Buyer. If the propane cost approximately 48 cents per 

litre inc HST for 850 litres. The Seller would receive $408.00 more and the Buyer pays 

$408.00 more on closing. 

Survey 


Some mortgage institutions may require a Buyer to produce a recent survey for the real 

property being purchased showing the boundaries of the lands and the location of the 

dwelling thereon.  If the Buyer requires a survey for the lender and the Seller does not 

have one, it is usually the responsibility and the expense of the Buyer not the Seller to 

have a new one prepared by an Ontario Land Surveyor. Title insurance will take care of 

the problems incurred in the absence of a survey or an up to date survey! It is highly 

recommended that title insurance be obtained in the absence of a survey. 

Mortgage Insurance


In the event that the amount of your first Mortgage on your purchase transaction exceeds 

75% of the purchase price, it will be necessary for you to purchase, for the protection of the 

Lender, mortgage loan insurance. This mortgage loan insurance premium that is paid is to 

protect the lender in the event that the mortgage is not paid. Do not confuse this with life, 

disability, or job loss insurance.  The cost of the insurance premium is paid by the Buyer. 

The amount of the mortgage insurance premium is calculated using a loan/value ratio, and 

may be added to the mortgage amount. 

Building Inspection Fees on House Inspection Fees

It is highly recommended that when purchasing a home that a building inspection be carried 

out on the structure, either prior to making an offer on the property or at the time you have 

entered into the Agreement of Purchase and Sale. The fee for a normal building inspection 

on (can range from $250.00 to $500.00) 

Legal Fees


Approximate legal fees on a residential real estate transaction are Purchase $650 to $750 

Sale $550 to $650.

NOTE: Remax Real Estate Centres Inc., does not take any responsibility for the accuracy 

of the costs listed above. The costs are to give you an idea of the approximate expense 

range. Also use an approximate range of value instead of one fixed amount. As mentioned 

previously, Buyers should budget 2-3% of the purchase price for closing costs.

Chris Thompson

Real Estate Professional

Re/Max Real Estate Centre Inc., Brokerage

Contact Me