Your offer is accepted. The price makes sense. The mortgage works.
Then your lawyer sends a number that wasn’t in any calculator.
That gap, the one no one warned you about, is closing costs. And for first-time buyers in Ontario, it’s where budgets quietly break.
Here’s what actually makes up the real cost of buying a home in Ontario, and why RECO requires these details to be explained before you commit.
Closing Costs First-Time Buyers Often Miss
Land Transfer Tax (LTT)
This is the biggest surprise.
Ontario charges land transfer tax (LTT) when property ownership changes. First-time buyers may qualify for a rebate, but you still need to pay the tax upfront on closing.
The amount varies by purchase price and location. Municipal taxes may also apply in some areas.
Legal Fees and Disbursements
In Ontario, using a real estate lawyer is mandatory. Legal costs typically include:
- Reviewing the Agreement of Purchase and Sale
- Title searches
- Registration
- Trust account handling
RECO strongly encourages buyers to seek independent legal advice, especially when reviewing financial obligations tied to the purchase.
Title Insurance
This protects you against title defects, fraud, and certain ownership issues. It’s a one-time cost, paid on closing, and arranged through your lawyer. Most buyers don’t budget for it. They should.
Adjustments (The Quiet Line Items)
Adjustments cover costs already paid by the seller that you reimburse on closing, such as:
- Property taxes
- Utilities
- Condo fees (if applicable)
They’re normal. They’re legal. And they add up.
Home Inspection
Not mandatory, but strongly recommended.
Inspection fees are paid upfront and are not included in closing costs. Skipping this step may save money short-term but increase risk long-term.
RECO highlights the risks buyers take on when they proceed without professional guidance or inspections
Buyer Representation Fees (The Part People Misunderstand)
In Ontario, buyer representation works under a Buyer Representation Agreement (BRA).
RECO requires agents to explain:
- What services you receive
- What you may owe
- When fees apply
In most transactions, the seller covers the buyer’s agent fees.
But RECO is clear: this is not guaranteed and must be spelled out in writing
If a seller doesn’t offer compensation, buyers may need to cover the difference. That affects affordability and should be discussed before offers are written.
Why RECO Cares About “Real Cost”
RECO’s role is consumer protection. That’s why:
- Agents must disclose financial obligations
- Representation agreements must outline payment terms
- Buyers must be informed of risks before proceeding
This isn’t a paperwork theater. It’s designed to prevent first-time buyers from committing to costs they didn’t understand
Location Matters More Than You Think
Buying in Hamilton, Brantford, Niagara, or Lake Erie communities comes with regional differences:
- Property tax adjustments vary
- Rural properties may include well, septic, or zoning considerations
- Waterfront and seasonal properties add legal complexity
These factors affect closing costs, timelines, and risk exposure, often before the offer is even accepted.
Quick Reality Check (Bookmark This)
Before you buy, budget for:
- Purchase price
- Down payment
- Land transfer tax
- Legal fees
- Title insurance
- Adjustments
- Inspection
- Moving and setup costs
If the numbers feel tight, that’s not a failure. That’s information.
Final Thought
The real cost of buying a home in Ontario isn’t hidden. It’s just rarely explained clearly.
RECO’s rules exist to protect buyers, but only if you understand them before you sign.
Clarity now saves stress later.
