7 Upfront Costs when Buying a Home

It is important to account for all the upfront costs of buying real estate. Here is a detailed list of these expenses:

Provincial Land Transfer Tax
Land Transfer Tax varies as a percentage of the property’s purchase price. It is usually about 0.5% to 2%. However, for first-time buyers there is a refund program. The provincial land transfer tax on a five hundred thousand dollar home, for example, is $6475,00.

Municipal Land Transfer Tax
There is a municipal Land Transfer Tax in the City of Toronto. This is in addition to the Provincial Land Transfer Tax. It is usually about 0.5% to 2%. However, for first-time buyers there is a refund program. The municipal land transfer tax on a five hundred thousand dollar home is $5725,00.

Harmonized Sales Tax (HST)
The resale of a home is exempt from HST. The purchase price of a newly constructed home is subject to HST.

Appraisal Fee
Your lender may require a property appraisal at your expense. A basic appraisal for mortgage purposes will usually cost between $150 and $250. You can often ask your lender to waive this fee.

Survey Fee
Your lender may require an up-to-date survey. You can ask the seller to provide one as a condition of your Offer to Purchase, or you may be required to pay (between $800 to $1000) to have one done.

Home Inspection
The best way to avoid unpleasant surprises is to arrange for a home inspection before you buy. A good home inspection is an objective, top-to-bottom examination of the home and everything that comes with it. Fees range widely, from about $250 to $500, depending on the age, size and complexity of the house and the condition that it is in.

Lawyer Fees and Disbursements
Even a straightforward home purchase requires a lawyer to review the Offer to Purchase, search the title, draw up mortgage documents and tend to the closing details. Lawyer fees including disbursements (out-of-pocket expenses incurred, such as registrations, title insurance, supplies) range from $600-$1,300.