Hidden costs of buying a home in Canada
Buying a home costs more than the purchase price. Plan for closing costs, inspections, legal fees, insurance, moving expenses, repairs, taxes, and condo fees.
The purchase price is only part of what you'll pay when buying a home in Canada. A range of additional costs come due at closing and after possession that first-time buyers sometimes overlook.
Closing Costs
Budget for two to four percent of the purchase price in closing costs on top of your down payment. These include:
Land transfer tax: Charged by the province and in some cities (Toronto charges its own municipal land transfer tax in addition to Ontario's provincial tax). Rates vary by province and purchase price. First-time buyers may qualify for a rebate in some provinces.
Legal fees: A real estate lawyer or notary handles the title transfer and closing paperwork. Legal fees typically range from $1,500 to $2,500 depending on the complexity of the transaction and the province.
Title insurance: Protects against title defects, fraud, and certain survey issues. Typically a one-time premium of a few hundred dollars.
Home inspection: A professional inspection before closing is strongly recommended. Costs vary by property size and location.
Mortgage default insurance: Required if your down payment is less than 20%. The premium ranges from 2.8% to 4% of the mortgage amount and is typically added to your mortgage balance.
After Closing
Moving costs: Professional movers, truck rental, or both.
Immediate repairs and updates: Few properties are move-in ready without some work. Budget for any repairs identified during the inspection or improvements you want to make before moving in.
New appliances or window coverings: Not always included in the sale.
Property tax adjustments: If the seller has prepaid property taxes for the year, you'll reimburse them for the portion covering your period of ownership.
Utility setup and deposits: Some providers require a deposit for new accounts.
Ongoing Costs After Purchase
- Property taxes
- Home insurance
- Maintenance and repairs
- Strata or condo fees if applicable
Going in with a realistic picture of all these costs helps you set a true budget rather than one based on the purchase price alone.