Case Study  ·  First-Time Buyers

The $22,500
Nobody Mentions

Every first-time buyer obsesses over the down payment. Almost nobody warns them about the second bill: land transfer tax, legal fees, title insurance, and a handful of smaller charges that all come due at once. Here is every line item on a $750,000 GTA purchase, so closing day holds zero surprises.

Case Study  ·  Hidden Closing Costs  ·  Updated June 2026

The Hidden Closing Costs of Buying Your First Home in the GTA

Mo Realty Team  ·  5 minute read

Remember Amara, from our 5% vs 20% down case study? She fought hard to save the $50,000 minimum down payment on her $750,000 townhome. Then, about two weeks before closing, her lawyer sent over the statement of adjustments, and the real bill appeared: roughly $22,500 more, due in cash, on top of the down payment. She is not alone. This is the single most common shock we see first-time buyers experience, so here is the whole bill, itemized.

~ 3%
of the purchase price: realistic closing costs on a Toronto first home, even after rebates.
$8,475
maximum combined land transfer tax rebates for a first-time buyer in Toronto.
1.5%
of the price: the closing fund lenders require you to prove you have, beyond the down payment.

Sources: Ontario Ministry of Finance and City of Toronto land transfer tax rebate rules; CMHC insured-mortgage closing cost requirement.

The full bill: Toronto vs the 905

Same buyer, same $750,000 home, same 5% down payment. The only difference is which side of the Toronto border the home sits on, because Toronto charges its own second land transfer tax on top of Ontario's.

Toronto

$750,000 home · first-time buyer · 5% down
Land transfer tax ×2 (after rebates)$14,475
Legal fees + disbursements~ $2,200
Title insurance~ $650
Home inspection~ $500
PST on CMHC premium$2,240
Closing adjustments~ $1,000
Moving + immediate costs~ $1,500
Closing costs total~ $22,500

905 (Peel, York, Durham, Halton)

$750,000 home · first-time buyer · 5% down
Land transfer tax ×1 (after rebate)$7,475
Legal fees + disbursements~ $2,200
Title insurance~ $650
Home inspection~ $500
PST on CMHC premium$2,240
Closing adjustments~ $1,000
Moving + immediate costs~ $1,500
Closing costs total~ $15,500
The real cash needed on closing day: down payment plus closing costs comes to about $72,500 in Toronto or $65,500 in the 905, on the same $750,000 home with the same 5% down. Buying one street outside Toronto saves this buyer about $7,000 in tax alone.

The big one: land transfer tax

Land transfer tax is the largest closing cost in the GTA by far, and Toronto is the only municipality in Ontario that charges its own second tax on top of the provincial one, effectively doubling the bill. First-time buyers get rebates on both (up to $4,000 provincial and $4,475 municipal), which helps most at lower price points. Here is what the combined tax looks like after rebates:

Purchase priceToronto (both taxes, after rebates)905 (provincial only, after rebate)
$550,000$6,475$3,475
$650,000$10,475$5,475
$750,000$14,475$7,475
$850,000$18,475$9,475
$1,000,000$24,475$12,475

Your lawyer claims both rebates automatically on closing, so there is no separate application, but you must qualify: you (and your spouse, in most cases) cannot have owned a home anywhere in the world before.

The sneaky ones

PST on the mortgage insurance premium. If you buy with less than 20% down, the CMHC premium itself can be rolled into the mortgage, but Ontario's 8% sales tax on that premium cannot. On Amara's $28,000 premium, that is $2,240 in cash at closing. Buyers who read our 5% vs 20% study already saw this one coming.

Closing adjustments. If the seller prepaid the year's property tax or utilities, you reimburse them for your share. The amount depends on the closing date; budget around $1,000 and treat anything less as a bonus.

Title insurance and legal fees. Your lawyer's bill (roughly $1,800 to $2,500 with disbursements) and title insurance (typically $500 to $800) are unavoidable, and worth every dollar; they are what makes the home legally, cleanly yours.

For condo buyers: add a status certificate review (about $100 plus your lawyer's time). For brand-new builds, the list grows again with Tarion enrolment and development charges, which deserve their own article.

Why lenders check for this: insured mortgages require proof that you hold at least 1.5% of the purchase price ($11,250 on $750,000) in available funds for closing costs, on top of your down payment. The lender knows this bill is coming. Now you do too.

How to soften the blow

What works in your favour

  • First-time buyer LTT rebates (up to $8,475 in Toronto) are applied automatically by your lawyer at closing.
  • FHSA and the Home Buyers' Plan let you pull tax-sheltered savings for the whole purchase, closing costs included.
  • The CMHC premium itself rides inside the mortgage; only its PST is due in cash.
  • Buying in the 905 cuts the land transfer bill roughly in half versus Toronto.

What catches buyers out

  • Budgeting only for the down payment and discovering the closing bill two weeks before the keys.
  • Assuming the LTT rebate erases the tax. At $750,000 in Toronto you still pay $14,475 after both rebates.
  • Forgetting the PST on the insurance premium is cash-only, not financeable.
  • Draining every dollar into the down payment and leaving nothing for adjustments, movers, or the first repair.

The rule of thumb

After first-time buyer rebates, plan for closing costs of about 3% of the purchase price in Toronto and about 2% in the 905. The 1.5% your lender makes you prove is a floor, not a budget.

Before you shop

Set your real budget as down payment plus closing costs, not down payment alone. If you have $70,000 saved, you are shopping with roughly $50,000 of down payment in Toronto, not $70,000.

Before you offer

Ask us for a closing cost estimate on the specific property. We prepare one with every offer we write, so the number on closing day matches the number you planned for.

How we actually help with this

Every offer we prepare comes with a line-by-line closing cost estimate for that exact property: both land transfer taxes with your rebates applied, the PST on your insurance premium if you are putting less than 20% down, and realistic figures for legal, title, and adjustments. The goal is simple: the cash you need on closing day should be a number you have known for months, not a surprise in your lawyer's email.

Figures are illustrative and for education only. They assume a $750,000 resale purchase by a qualifying first-time buyer with 5% down ($50,000), a $28,000 CMHC premium (financed) with Ontario's 8% PST ($2,240) paid in cash at closing, and typical 2026 ranges for legal fees, title insurance, inspection, adjustments, and moving. Land transfer tax figures reflect Ontario and City of Toronto rates with maximum first-time buyer rebates of $4,000 (Ontario) and $4,475 (Toronto); eligibility rules apply. New construction purchases involve additional costs (HST treatment, Tarion enrolment, development charges) not covered here. Actual costs vary by property, municipality, lawyer, and lender. This is not legal, tax, or financial advice. Speak with your lawyer, a licensed mortgage professional, and Mo Realty for figures specific to your purchase.
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