Ontario Closing Costs and Land Transfer Tax: Niagara Guide

Written by Emily Barry

Updated November 1, 2026. Quick answer: Ontario closing costs usually run between 1.5% and 4% of the purchase price, and land transfer tax is the biggest piece. On a $567,400 home, Niagara’s benchmark price in September 2026, Ontario’s land transfer tax is $7,823. First-time buyers can get up to $4,000 of that back, and unlike Toronto, Niagara doesn’t charge a second, municipal land transfer tax.

Closing costs are the cash you need on top of your down payment, and they catch a lot of buyers off guard. Here’s what they are, what each one costs, and how to budget for them before you make an offer in Niagara.

Aerial view of a Niagara Falls neighbourhood. Ontario closing costs are paid on top of your down payment.

What are Ontario closing costs?

Closing costs are the fees and taxes you pay to complete a purchase, mostly on or before closing day. Your real estate lawyer collects most of them and pays them out when the deal closes. The main ones:

Ontario land transfer tax, paid when the sale is registered.
Legal fees and disbursements for your real estate lawyer, including registration and searches.
Title insurance, which most lenders require.
Adjustments, for property tax or utilities the seller has already prepaid.
Provincial sales tax on mortgage default insurance, if you put down less than 20%.
Home inspection, paid before closing if your offer includes one.
Home insurance, which your lender will want in place by closing day.

How much should you budget for Ontario closing costs?

The Financial Consumer Agency of Canada suggests budgeting between 1.5% and 4% of the purchase price for closing costs (FCAC).

Example: on a $500,000 home, that’s 1.5% × $500,000 = $7,500 at the low end, up to 4% × $500,000 = $20,000 at the high end. Where you land depends mostly on whether you’re a first-time buyer and whether you need mortgage default insurance. Also, your lender will want to see that you have this cash, separate from your down payment. Our guide to how much house you can afford in Niagara walks through the rest of the budget.

Ontario land transfer tax rates

Ontario charges land transfer tax in brackets, like income tax. Each rate applies only to the part of the price inside that bracket (Ontario):

Part of the purchase price	Rate
Up to $55,000	0.5%
$55,000 to $250,000	1.0%
$250,000 to $400,000	1.5%
$400,000 to $2,000,000	2.0%
Over $2,000,000 (one or two single-family homes)	2.5%

How it adds up on a $500,000 home: $55,000 × 0.5% = $275, plus $195,000 × 1% = $1,950, plus $150,000 × 1.5% = $2,250, plus $100,000 × 2% = $2,000. Total: $6,475.

Purchase price	Ontario land transfer tax	First-time buyer pays
$400,000	$4,475	$475
$500,000	$6,475	$2,475
$567,400 (Niagara benchmark, September 2026)	$7,823	$3,823
$650,000	$9,475	$5,475
$800,000	$12,475	$8,475

Shortcut for any price between $400,000 and $2 million: price × 2% − $3,525. For example, $567,400 × 2% − $3,525 = $7,823. The $567,400 figure is the Niagara Association of REALTORS® benchmark for September 2026 (NAR).

The buyer pays land transfer tax, not the seller. It’s due when your purchase is registered, which your lawyer does on closing day (Ontario).

Selling your current home too? Our principal residence exemption guide explains when the gain on your sale is tax-free and when it isn’t.

First-time buyers get up to $4,000 back

If you’ve never owned a home, Ontario refunds up to $4,000 of your land transfer tax. In other words, there’s no land transfer tax on the first $368,000 of the price (Ontario). To qualify, you must:

Be at least 18.
Never have owned a home, or an interest in one, anywhere in the world.
Not have a spouse who owned a home while you were married or living together.
Move into the home as your principal residence within nine months.
Be a Canadian citizen or permanent resident, or become one within 18 months of closing.

You can claim it at closing, so your lawyer takes it off the tax you owe. If you miss it, however, you can still apply to Ontario within 18 months. If you’re buying with someone who has owned before, the refund is reduced to your share. For example, if a parent who has owned a home buys 50/50 with a first-time buyer child, the child can claim up to $2,000. Our first-time home buyer programs guide covers the other programs you can stack with it. And here’s where first-time buyers are finding deals in Niagara right now.

Buying your first home in Niagara? Book a buyer’s meeting and we’ll map out your full cash to close, including the refund, before you start looking.

No municipal land transfer tax in Niagara

If you’re moving from Toronto, this is good news for your budget. Toronto charges its own municipal land transfer tax on top of Ontario’s, using the same rates up to $2 million (City of Toronto). Niagara’s cities and towns don’t have one, so you pay the provincial tax only.

On a $650,000 home	In Niagara	In Toronto
Ontario land transfer tax	$9,475	$9,475
Municipal land transfer tax	$0	$9,475
Total, repeat buyer	$9,475	$18,950
Total, first-time buyer	$5,475	$10,475

Toronto first-time buyers get a separate rebate of up to $4,475 on the municipal tax (City of Toronto), which is included above. Even so, the same first-time buyer still saves $5,000 in land transfer tax by buying in Niagara. More on that in what it really costs to move from Toronto to Niagara.

Mortgage default insurance and the 8% PST you pay in cash

If your down payment is under 20%, your mortgage needs default insurance. The premium is a percentage of your mortgage, and you can add it to the loan (CMHC):

Down payment	Premium on the mortgage
5% to 9.99%	4.00%
10% to 14.99%	3.10%
15% to 19.99%	2.80%

However, Ontario charges provincial sales tax on that premium, and it can’t be added to your mortgage, so it’s paid in cash at closing (CMHC). The rate is 8% (Retail Sales Tax Act).

Example: on a $500,000 home with 10% down, your mortgage is $450,000. The premium is 3.10% × $450,000 = $13,950, added to the mortgage. The PST is 8% × $13,950 = $1,116, due in cash on closing day.

At Niagara’s benchmark with the minimum down payment: on a $567,400 home, the minimum down is 5% of the first $500,000 plus 10% of the rest, or $31,740 (FCAC). That leaves a $535,660 mortgage, a 4.00% premium of $21,426 added to the loan, and $1,714 in PST due in cash at closing.

Other Ontario closing costs to plan for

Legal fees and disbursements. CMHC puts legal fees at a minimum of $500, and most deals cost more once disbursements are added (CMHC). Every buyer needs a real estate lawyer. Ask for an all-in quote, including disbursements, before you firm up.
Title insurance. Most lenders require it, and your lawyer arranges it.
Property tax and utility adjustments. If the seller prepaid the year’s property tax, you pay them back for the days after closing. It shows up on your statement of adjustments.
Home inspection. Around $500, according to CMHC, paid while your offer is still conditional. Larger, older or rural homes, and septic or well inspections, can cost more. Here are the red flags to watch for.
Appraisal. If your lender requires one, CMHC estimates $250 to $350.
HST on services. There’s usually no HST on a resale home itself, but you do pay it on legal fees, the inspection and your movers.
Home insurance. Your lender needs proof of coverage before it releases the mortgage.
Moving and set-up costs. Movers, utility hook-ups and the first round of repairs aren’t closing costs, but they come due the same week.

Your lawyer sends a statement of adjustments a few days before closing with the exact amount you need. Our post on what happens on closing day explains the rest.

Buying a new build or buying from outside Canada

New construction: HST applies to newly built homes, but not to resale homes (Ontario). Builder agreements signed between April 1, 2026 and March 31, 2027 may qualify for a rebate of up to $130,000 (CRA). Confirm your eligibility with your lawyer or accountant.
Buyers who aren’t Canadian citizens or permanent residents: Ontario’s 25% Non-Resident Speculation Tax applies on top of land transfer tax. Our foreign buyer ban guide explains who’s affected.

Ontario closing costs: frequently asked questions

How much are closing costs in Ontario?

Plan for 1.5% to 4% of the purchase price. On a $500,000 home, that’s $7,500 to $20,000, with land transfer tax as the biggest single cost.

How much is land transfer tax on a $500,000 home in Ontario?

$6,475. A first-time buyer who qualifies for the full $4,000 refund pays $2,475.

Who pays land transfer tax in Ontario, the buyer or the seller?

The buyer. Your lawyer pays it when the purchase is registered on closing day.

Do first-time buyers pay land transfer tax in Ontario?

Eligible first-time buyers get a refund of up to $4,000, which means no land transfer tax on the first $368,000 of the price. You must never have owned a home anywhere and must move in within nine months.

Is there a municipal land transfer tax in Niagara?

No. Toronto is the city that charges its own municipal land transfer tax on top of Ontario’s. Buyers in Niagara pay the provincial land transfer tax only.

Can closing costs be added to my mortgage?

Mostly no. Land transfer tax, legal fees and the 8% PST on mortgage default insurance are paid in cash at closing. The default insurance premium itself can be added to the mortgage.

When do I pay closing costs?

Most are paid on closing day through your real estate lawyer, who sends a statement of adjustments with the exact amount a few days before. A home inspection is paid earlier, if your offer includes one.

Do I pay HST when buying a resale home in Ontario?

Usually not. HST applies to new or substantially renovated homes, though you’ll still pay HST on services like legal fees and the home inspection.

Talk to a Niagara team before you make an offer

Want your actual closing costs worked out before you write the offer, not after? Call us at 905-357-8067 or email emily@thebarryteam.ca.

This article is general information, not legal or tax advice. Your lawyer will confirm your exact closing costs, and your accountant can confirm any tax rebates.