10 Closing Costs When Buying a Home: A Complete Guide for First-Time Buyers

Buying a home is an exciting milestone, but for many first-time buyers, closing costs can come as a surprise. Beyond the purchase price, these fees and expenses can add thousands to your upfront costs. Understanding what you’ll pay at closing is key to budgeting effectively and making your home-buying experience smooth and stress-free.

In this guide, we break down the 10 most common closing costs when buying a home in Canada, along with tips and insights from Ana Bastas Realty to help you plan with confidence.

1. Home Inspection: Protect Your Investment

A home inspection is one of the first steps in the buying process and is highly recommended for all buyers. Professional inspectors evaluate the home’s structure, roofing, plumbing, electrical systems, and more, identifying any potential issues before you finalize your purchase.

Typical cost: $350 – $450

Why it matters:
A home inspection protects you from unexpected repairs after closing and can give you leverage to negotiate with the seller if problems are discovered. Skipping this step may cost more in the long run.

Tip: Even brand-new homes can have defects. Schedule your inspection early to avoid last-minute surprises.

2. Legal Fees: Ensure a Smooth Transaction

Purchasing a home involves complex legal documentation, including the purchase agreement, mortgage registration, and title search. Hiring a real estate lawyer or notary ensures your transaction is legally sound and protects your interests.

Typical cost: $800 – $1,500 (plus disbursements)

What’s included:

• Reviewing the purchase agreement

• Conducting a title search

• Registering the property and mortgage

• Coordinating closing documents

Tip: Think of your lawyer as a safety net — they prevent legal issues that could arise during or after your purchase.

3. Home & Fire Insurance: Protect Your Home

Your lender will require proof of home and fire insurance before issuing your mortgage. This coverage protects your home against fire, theft, water damage, and liability.

Estimated cost: Starting around $500 per year

Why it matters:
Insurance provides peace of mind, ensuring that your investment is protected in case of unexpected events.

4. Mortgage Insurance Tax (If Applicable)

If your down payment is less than 20%, mortgage default insurance is required. While the premium is typically added to your mortgage payments, provincial sales tax (PST) is often due at closing.

Example:
Mortgage insurance: $5,000
PST at 8% = $400 due at closing

Tip: Factor this tax into your budget to avoid last-minute surprises.

5. Land Transfer Tax: Plan Ahead

Many provinces and municipalities charge a land transfer tax (or property transfer fee) when ownership changes hands.

Typical cost: 0.5% – 2% of the purchase price

First-time buyer benefit: Many provinces offer rebates or exemptions to first-time buyers, which can save you thousands.

Tip: Research your province’s rules early and calculate potential rebates to plan your finances.

6. Title Insurance: One-Time Peace of Mind

Title insurance protects buyers from fraud, ownership disputes, or defects in the property title or survey.

Typical cost: $150 – $350

Why it matters:
It’s a one-time payment for lifetime protection — a small cost for avoiding potential legal and financial headaches in the future.

7. Prepaid Costs: Adjustments for a Smooth Start

Sometimes, the seller has prepaid property taxes, utilities, or water bills. Buyers are required to reimburse these costs at closing.

Estimated cost: Several hundred dollars

Benefit: Your first few months in the home will already have these essential bills covered, providing peace of mind.

8. New Construction Costs: Beyond the Base Price

Buying a newly built home often comes with additional costs not included in the purchase price, such as:

• Landscaping

• Driveway paving

• Upgrades or finishes

Taxes: New homes are subject to 5% GST or 13% HST (often included). Federal rebates may reduce the effective tax to around 3.5% for homes under $350,000.

Tip: Ask your builder for a detailed cost breakdown to avoid unexpected expenses at closing.

9. Appraisal Fee: Confirm Your Home’s Value

Your lender may request a professional appraisal to verify the market value of the property.

Typical cost: $300 – $500

Why it matters:
An accurate appraisal protects both the lender and buyer, ensuring the mortgage matches the property’s market value.

10. Moving-In Expenses: Plan Your Final Steps

Finally, moving costs are part of your closing budget. These may include:

• Rental truck or professional movers

• Rekeying locks

• Cleaning services and supplies

Estimated cost: $500+

Tip: Create a moving checklist early to avoid last-minute stress and surprise costs.

Bonus: First-Time Home Buyer Tax Credit

Eligible buyers may receive up to $750 in federal tax relief when filing their income tax return, helping offset some of your closing costs.

Tip: Keep all closing documents handy — your accountant will need them to claim this credit.

Connect with Ana Bastas Realty

If you're an agent exploring a new environment for 2026, or a buyer ready to make your move, we’d love to talk about how we can support your goals.

Ana Bastas — Team Leader, Mentor, Advisor & Wealth Builder
Ana Bastas Realty | REAL Brokerage Ontario Ltd.
📱 289.670.5888
🌐 www.anabastas.ca
📧 info@anabastas.ca
Serving Toronto, Halton, Hamilton, Niagara & Ottawa

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