Closing costs
The BrokerFold Team — Product + Engineering
Last reviewed
Closing costs are the collection of taxes, fees, and adjustments a buyer pays on top of the purchase price to complete a transaction — due in cash on closing day, not financeable inside a standard mortgage. The buyer’s list typically includes land transfer tax (the big one), legal fees and disbursements, title insurance, lender charges such as an appraisal, and adjustments — reimbursing the seller for prepaid property tax or utilities covering days after closing.
The ones buyers forget
Three items reliably surprise first-time buyers. Adjustments, because they’re calculated at the end and simply appear on the statement. PST or provincial tax on mortgage insurance premiums where high-ratio insurance applies — the premium itself rolls into the mortgage, but its tax is due in cash. And on new construction, development charges and levies plus warranty enrolment, which is why a new-build closing budget is its own exercise. Moving costs, immediate repairs, and utility setup aren’t closing costs strictly, but the same bank account pays them the same week.
Why it matters for your practice
“How much do I really need?” is the practical version of every affordability question, and the honest answer is price-and-place-specific: the same house closes very differently in Toronto than in Halifax. A closing-cost explainer — paired with the completion-day mechanics — is the page that makes your buyer’s guide feel like advice rather than marketing.
Frequently asked questions
How much should a buyer budget for closing costs?
A common planning range is roughly two to four percent of the purchase price on resale homes, dominated by land transfer tax — more in Toronto because of the municipal tax, less in provinces or price bands with lighter transfer taxes. New construction adds its own layer (development levies, HST/GST treatment, Tarion or warranty enrolment), so new-build budgets need their own line items.
Does the seller have closing costs too?
Yes, different ones: real estate commission plus tax on it, legal fees, mortgage discharge or prepayment penalties, and adjustments. Sellers don't pay land transfer tax — that's the buyer's — but commission usually makes selling costs the larger absolute number.
Keep reading
- Land transfer tax Land transfer tax is the provincial (and in Toronto, also municipal) tax a buyer pays on closing — how it's calculated, rebates, and who's exempt.
- Title insurance Title insurance protects against defects in ownership — fraud, liens, survey problems — for a one-time premium. What it covers and what it doesn't.
- Completion vs possession date In BC a sale closes in stages: the completion date moves title and money, the possession date hands over keys, and the adjustment date splits the bills.
- Real estate commission calculator Commission, the listing/buyer split, GST or HST, and what the seller nets.