Buying a home is one of the biggest financial moves you’ll make—and if you’re not prepared for the extra expenses beyond your down payment, it can quickly become overwhelming. In 2025, Canadian homebuyers need to account for a variety of hidden costs when budgeting for a purchase.
Here’s a breakdown of the key expenses that can catch buyers off guard.
1. Land Transfer Tax (LTT)
Most provinces charge a land transfer tax, calculated as a percentage of your home’s purchase price.
Examples:
- Ontario: Up to 2.5% + 2.5% in Toronto (municipal).
- British Columbia: 1-3%, plus an additional 2% on homes over $3 million.
- Quebec: “Welcome tax” based on a sliding scale.
First-time buyer rebates are available in many provinces, which can save you thousands.
2. Legal Fees and Disbursements
You’ll need a lawyer or notary to handle closing. Expect to pay:
- $1,000 to $2,500 in legal fees.
- Extra for title searches, registrations, and courier fees.
3. Home Inspection and Appraisal
- Home inspection: ~$400–600 (recommended for resale properties).
- Appraisal fee: ~$300–500 (often required by your lender).
4. GST/HST on New Builds
If you’re buying a new construction home, GST/HST (usually 5% federal + provincial portion) applies.
Good news: In 2025, the federal government offers a GST rebate for first-time buyers on homes up to $1.5 million.
5. Mortgage Insurance Premiums (CMHC)
If your down payment is under 20%, you’ll need mortgage default insurance:
- Premium is added to your mortgage.
- Ranges from 2.8% to 4% of the loan amount.
6. Adjustments at Closing
You may need to reimburse the seller for:
- Prepaid property taxes.
- Utility bills.
- Condo fees (if applicable).
7. Moving and Setup Costs
- Movers: $1,000 to $3,000.
- Utilities and internet setup.
- Appliances or furnishings if not included.
8. Title Insurance
Most lenders require this, and it’s also wise for buyers. Cost:
- ~$250–400 one-time fee.
9. Property Insurance
Required to close on your mortgage. Annual premium varies based on home type and location:
- Expect $900 to $1,500 per year for most properties.
Final Thoughts
These hidden costs can add 3–6% to your total home price. To avoid surprises:
- Ask your REALTOR® or lawyer for an itemized closing cost estimate.
- Get quotes from movers, inspectors, and insurers early.
- Use an online calculator to simulate total expenses.
With smart planning, you can go from house hunting to homeownership with confidence. When you’re ready to get pre-approved for a mortgage to start house shopping, give us a call. We’d love to assist you in finding your dream home!