Real Estate
How Much Are Real Estate Closing Costs in Oakville
Buying a home in Oakville is exciting, but the purchase price is not the only number that matters. On closing day you will need extra funds on hand to cover several one time costs. Knowing these in advance helps you budget properly and avoid a stressful surprise. Here is what closing costs look like for an Oakville buyer and roughly how much to set aside.
What are closing costs
Closing costs are the fees and taxes you pay to complete the purchase of a home, on top of your down payment. Most of them are paid on or just before the closing date and cannot be added to your mortgage. They need to be available in cash, so they belong in your budget from the start.
Land transfer tax is the biggest cost
When you buy a property in Ontario you pay Ontario land transfer tax to the province. It is calculated on a sliding scale, so higher portions of the price are taxed at higher rates. The good news for local buyers is that Oakville is not part of the City of Toronto, so there is no second municipal land transfer tax here. A buyer purchasing the same priced home in Toronto would pay roughly double.
The table below shows the Ontario land transfer tax on a range of Oakville prices. There is no municipal land transfer tax added in Oakville.
| Purchase price | Ontario land transfer tax |
|---|---|
| $600,000 | $8,475 |
| $900,000 | $14,475 |
| $1,200,000 | $20,475 |
| $1,500,000 | $26,475 |
| $2,000,000 | $36,475 |
Try it with your own number using the calculator below.
Oakville real estate
Land transfer tax calculator
See the Ontario land transfer tax on an Oakville home. Oakville sits outside Toronto, so there is no second municipal land transfer tax here.
You pay in land transfer tax
$14,475
This is an estimate for general guidance and not legal or tax advice. Ask James Deep Law to confirm the exact figures for your purchase.
First time buyer reduction. If you have never owned a home anywhere in the world, you may qualify for the Ontario first time home buyer reduction of up to 4,000 dollars. That fully covers the tax on homes priced up to about 368,000 dollars, and reduces it on anything above that. Your lawyer can apply the reduction at closing so the tax is reduced right away rather than being paid up front and claimed back later.
Legal fees and disbursements
Your real estate lawyer handles the legal side of the purchase. That includes reviewing the agreement, searching title, registering the transfer and mortgage, working with your lender, and managing the flow of funds on closing. The cost has two parts. There is the lawyer fee for the work, and there are disbursements, which are out of pocket costs the lawyer pays on your behalf such as title and government search fees. Many Ontario buyers budget between 1,795 and 2,295 dollars all in, although the exact amount depends on the deal. James Deep Law is happy to give you a clear quote before you commit, to avoid surprises.
Other closing costs to plan for
- Title insurance. A one time premium, related to the purchase price, that protects you and your lender against title problems and certain kinds of fraud.
- Home inspection. Usually around 400 to 700 dollars if you choose to have one before you firm up your offer.
- Status certificate review if you are buying a condo. The condo corporation typically charges up to 100 dollars for the certificate, and your lawyer reviews it to flag any known issues with the building or its finances.
- Closing adjustments. You reimburse the seller for things they prepaid, such as property taxes or utilities, for the part of the period you will own the home.
- Mortgage related costs. If your down payment is under 20 percent, mortgage default insurance applies, and in Ontario the provincial sales tax on that premium is payable on closing.
- Appraisal fee. Most banks and lenders deduct an appraisal fee of up to 300 dollars from the mortgage advance.
Do you pay HST on an Oakville home
For most resale homes the answer is no, with some exceptions. HST generally does not apply when you buy a previously owned house or condo. It can apply to brand new construction from a builder, and there are new government incentives regarding HST on new homes. Ask your lawyer to confirm the HST obligations for your transaction and whether you are eligible for any rebates.
How much should you budget overall
A practical rule of thumb for Oakville is to set aside roughly 1.5 to 4 percent of the purchase price for closing costs, with land transfer tax making up the largest share. The best approach is to estimate early, then ask your lawyer for exact figures once you have an accepted offer. That way the only surprise on closing day is the keys to your new home.
Frequently asked questions
Do I need a real estate lawyer to buy a house in Oakville?
Yes. In Ontario only a lawyer can register the transfer of land and the mortgage, so every purchase involves a real estate lawyer. They also protect you by reviewing the deal and the title before you are committed.
How much is land transfer tax in Oakville?
Oakville buyers pay only the Ontario land transfer tax, since there is no municipal land transfer tax outside the City of Toronto. As examples, the tax is about 14,475 dollars on a 900,000 dollar home and about 26,475 dollars on a 1,500,000 dollar home. First time buyers may qualify for a reduction of up to 4,000 dollars.
When do I pay closing costs?
Most closing costs are due on or just before the closing date and are collected by your lawyer. They cannot be rolled into your mortgage, so you need the funds available in cash.
Are closing costs cheaper in Oakville than in Toronto?
Often yes, because Oakville does not charge a municipal land transfer tax. On a Toronto purchase a buyer pays both the provincial and the municipal land transfer tax, which can nearly double that line item.
Can a lawyer help me get the first time buyer reduction?
Yes. If you qualify, your lawyer can apply the Ontario first time home buyer reduction at closing so the tax is reduced right away rather than being paid up front and claimed back later.
Oakville real estate
Buying or selling in Oakville
James Deep Law has guided Oakville buyers and sellers through closing for over thirty years. Get clear advice and a fixed quote before you commit.
This article provides general information about Ontario law and is not legal advice. For advice about your own situation, please contact James Deep Law.