If you’re thinking about buying a property, whether it's as your home or an investment, here’s something that doesn’t get talked about enough: closing costs.
These are the expenses that come up between your offer being accepted and the day you get the keys. Most buyers focus on the purchase price (understandably), but these additional costs can sneak up if you’re not prepared.
Here’s what’s typically included in Ottawa when referring to "closing costs":
A good estimate? Budget around 1.5-2% of the purchase price for closing costs, just to be safe.
These are the expenses that come up between your offer being accepted and the day you get the keys. Most buyers focus on the purchase price (understandably), but these additional costs can sneak up if you’re not prepared.
Here’s what’s typically included in Ottawa when referring to "closing costs":
- Legal fees for your real estate lawyer
- Title insurance and title search fees
- Property tax adjustments—you may need to reimburse the seller for property taxes they’ve already paid, depending on the closing date
- Land transfer tax, which is a provincial tax in Ontario and often one of the larger line items (Ottawa doesn’t have the extra municipal tax like Toronto does)
Example for a purchase of a property for $1,000,000.
Legal fees $1800 + HST = $2,034 (varies by lawyer/law firm)
Title Insurance & Title Search Fees = $1,000 (this varies widely so just a reasonable placeholder as an approximation; could be as little as $600 and up)
Land Transfer Tax = $16,475
Property Tax Adjustment (if purchased mid-year) = $5,000 (approx)*
Total Closing Cost Estimate = $24,509
If you want to walk through an example or talk about what this might look like for a specific property, I’m happy to help.
*Property tax is based on the most recent MPAC assessment. These can vary widely but I'm using $10,000 as an approximation.
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