Investor guide
Closing Costs You Didn't Budget For
Land transfer tax, development charges, legal fees and the surprises that catch buyers off guard.
Costs buyers often overlook
New-construction closing statements can include more than the balance of the purchase price. Common items include land transfer tax, legal fees, title insurance, utility meter charges, property-tax adjustments and builder levies described in the agreement.
Toronto purchases may be subject to both provincial and municipal land transfer tax. Eligible first-time buyers may qualify for rebates, but eligibility should be confirmed rather than assumed.
Builder adjustments and occupancy
Development, education and municipal levies can be material. A lawyer can identify which charges are capped and which remain open-ended. During interim occupancy, buyers may also pay a monthly occupancy fee made up of estimated taxes, maintenance and interest on the unpaid balance.
- Ask for written caps on development-related charges.
- Budget for legal fees and title insurance.
- Plan for moving, appliances, window coverings and utility setup.
- Investors should obtain advice on HST rebate rules and cash-flow timing.
Build a safer reserve
There is no universal percentage that fits every purchase. Ask your lawyer and mortgage professional for project-specific estimates, then add a contingency for changing taxes, rates and adjustments.
Review the estimate again before occupancy and final closing so funds are accessible when requested.
Key takeaway
Set aside a separate closing reserve and have a lawyer review capped and uncapped adjustments during the cooling-off period.
This guide is general information, not legal, tax or financial advice. Rules, fees and program details can change; confirm current requirements with the appropriate qualified professional.