The purchase price is not the full cost of buying a home.
Before making an offer, keep cash available for closing costs in addition to your down payment and deposit.
Main Costs to Plan For
- Ontario Land Transfer Tax: calculated from the purchase price, with possible rebates for eligible first-time buyers.
- Toronto Municipal Land Transfer Tax: applies in addition to the provincial tax when the property is in Toronto.
- Legal fees and disbursements: vary by lawyer and transaction. Around $2,000 is a reasonable planning placeholder for many straightforward purchases, but get an actual quote.
- Title insurance: commonly arranged through the lawyer.
- Adjustments: property tax, utilities, condo fees or other prepaid amounts may be adjusted on closing.
- Home inspection and lender/appraisal costs: where applicable.
Deposit vs Down Payment
The deposit is paid as part of the Agreement of Purchase and Sale and is credited toward the purchase price on closing. The amount varies by market and offer strategy. The down payment is the total cash contribution toward the purchase. A 20% down payment usually avoids mortgage default insurance on an eligible purchase; it is not the same thing as the offer deposit.
Official references: Ontario Land Transfer Tax calculation and Toronto MLTT calculator.
Ask your lawyer and lender for transaction-specific numbers before waiving conditions or finalizing the closing budget.