Closing costs - Homebuying in Barrhaven, Nepean, Ontario
Many people often ask me about closing costs on their purchase. In general, there are 3 sets of closing costs when you're buying a home. 
Land transfer tax is payable on the value of the purchase. Depending upon the price of the home you're buying, budget on at least a few thousand dollars. Plug in your purchase price into a land transfer tax calculator to get a better idea of what will be owing. If you're lucky enough to be a first time buyer, the first $2,000.00 of land transfer tax is waived. Although this refund used to only apply if you were a first time buyer purchasing brand new construction from a builder, it's recently been extended to resale homes as well. Good news for younger people worried about closing costs!
When you're buying a house, there are a number of search and registration costs. Title searches, tax certificates, title insurance, and registration fees can add up to $700-900 in closing costs.
If you're buying from a builder, you will probably also be paying the enrolment fee with Tarion (new home warranty corporation). This might be between $500-700, based upon the purchase price. The builder's lawyer will also charge you about $175.00 for the preparation of the transfer of title.
A number of title insurance companies operate in Ontario, but the cost of title insurance policies are comparable, usually about $300.00 for an owner and lender policy. In terms of closing costs, title searches can range from a low of $150.00 to a high of $300 for a property in a new subdivision. Registration fees for a transfer of title and a mortgage are $141.00. If you're buying a condominium, the price for a status certificate is an extra $100.00.
The last part of closing costs are the legal fees. Legal fees can also range, but I would budget between $800- $1300.00 for legal fees on a routine purchase. If you encounter problems, or you want a more detailed review of a status certificate, for example, fees will be higher. If you're buying privately, you may also have had a lawyer draft your agreement of purchase and sale. This might cost between $300-$500 depending upon whether there are any negotiations involved or not.
If you ask, most lawyers can give you a good estimate of how much money you're going to need in closing costs. If you're on a tight budget, it's best to ask sooner rather than later. Check out more tips for buyers.
This blog entry is intended as general information only and does not constitute legal advice. If you need legal advice, please talk to a lawyer.
Kerry Fox is a real estate lawyer practicing in Nepean, Ontario.
Comments(1)