Understanding Closing Costs in 2025: What Buyers and Sellers Need to Know

📍 Serving Halton Hills, Oakville, Burlington, Mississauga, Hamilton, and the GTA | est. 2012

When you're buying or selling a home in Ontario in 2025, the purchase price is only part of the equation. Closing costs—those often-overlooked expenses that come due on or before the day you get the keys—can significantly impact your budget. Whether you're a first-time buyer or a seasoned investor, understanding these costs can help you avoid surprises and prepare for a successful transaction.

In this guide, we break down closing costs for buyers and sellers, highlight what’s new or different in 2025, and offer expert advice on how to navigate them.

🔍 What Are Closing Costs?

Closing costs are the expenses paid at the completion of a real estate transaction, in addition to the property’s purchase price. They can range from 1.5% to 4% of the purchase price for buyers and can also affect a seller’s net proceeds after the sale.

Both parties—buyer and seller—are responsible for different types of closing costs.

🏡 Closing Costs for Buyers in Ontario (2025)

1. Land Transfer Tax (LTT)

One of the largest expenses for Ontario buyers, LTT is calculated as a percentage of the property’s value.

• Ontario’s LTT ranges from 0.5% to 2.5%.

• In Toronto, there’s an additional Municipal Land Transfer Tax, effectively doubling the cost.

• First-time buyers may be eligible for a rebate of up to $4,000 (Ontario) and $4,475 (Toronto).

2. Legal Fees

Legal representation is mandatory for closing a home purchase. Expect to pay:

• $1,000–$2,500 depending on the complexity of the deal.

• Fees include title searches, registration of the mortgage and deed, and document review.

3. Title Insurance

Title insurance protects against title defects, unpaid taxes, and liens. It’s often required by lenders.

• One-time cost: $250–$500

4. Home Inspection (Pre-Purchase)

Optional but strongly recommended.

• Cost: $400–$700

5. Appraisal Fee

If you’re financing with a mortgage, the lender may require an appraisal.

• Cost: $350–$600

6. CMHC Mortgage Insurance (if applicable)

If your down payment is under 20%, mortgage insurance is required. The premium is added to the mortgage but still affects affordability.

• Rate: 2.8%–4% of the mortgage amount

7. Adjustments for Property Taxes & Utilities

Buyers may need to reimburse the seller for prepaid property taxes, condo fees, or utilities.

8. Other Miscellaneous Costs

• Moving costs: $500–$2,000

• Utility connection fees: $50–$200

• Status Certificate (for condos): $100

🏠 Closing Costs for Sellers in Ontario (2025)

1. Real Estate Commission

This is the largest closing cost for sellers.

• Typically 4–5% of the sale price, split between the listing and buyer agents

• Commission is negotiable but should reflect the value and service provided

2. Legal Fees

Sellers also require a lawyer to discharge the mortgage, handle title transfer, and prepare the statement of adjustments.

• Cost: $900–$1,500

3. Mortgage Discharge Fees / Penalties

If you're ending your mortgage term early, your lender may charge:

• $200–$500 administrative discharge fee

• Penalty fees (can be 3 months’ interest or an interest rate differential)

4. Capital Gains Tax (if applicable)

• Applies to non-primary residences (rental/investment properties)

• 50% of the capital gain is taxable at your marginal tax rate

5. Adjustments for Prepaid Expenses

Sellers may receive a credit for prepaid items (e.g., taxes, utilities).

🔄 What’s New in 2025?

1. Tighter Lending Rules
   Due to continued pressure on housing affordability, lenders have adopted stricter qualifying criteria. This means:

• Buyers need more documentation.

• Legal fees could rise slightly due to longer review periods.

2. Land Transfer Tax Debate
   Ontario continues to explore updates to the land transfer tax brackets. While no formal changes have been made as of June 2025, discussions around increasing the rebate cap for first-time buyers are ongoing.

3. Environmental Levies
   Some municipalities are exploring climate-related levies or infrastructure fees, though these are not yet province-wide.

🧮 Sample Closing Cost Estimate for a $750,000 Home in Ontario (2025)

💡 Tips to Prepare for Closing Costs

For Buyers:

• Get a Pre-Approval: Know your budget and buffer room for closing costs.

• Request a Detailed Estimate: Ask your lawyer and lender for a breakdown ahead of time.

• Budget 3–4% extra: Always plan for the unexpected.

For Sellers:

• Review Your Mortgage Terms: Understand penalties or fees before accepting an offer.

• Ask About Deductibles: See if any selling costs are tax deductible (for investors).

• Work With a Trusted Agent: An experienced REALTOR® can help negotiate favorable terms and explain cost implications.

📣 Final Thoughts

Whether you’re buying or selling in 2025, closing costs in Ontario are a vital part of the real estate journey. Proper planning and education can prevent financial strain and lead to a smoother transaction.

At Ana Bastas Realty, we ensure our clients understand every cost associated with their move—before they commit. If you're considering entering the market, we're here to walk you through each step with expert care and transparency.

📞 Have questions about closing costs or need help buying or selling in Ontario? Contact us today!

📍 Serving Halton Hills, Oakville, Burlington, Mississauga, Hamilton, and the GTA
est. 2012