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First Time Homebuyers: Don’t Overlook These Budget-Busting Costs

By Sarita Harbour

Published June 5, 2023 • 3 Min Read

As a first time homebuyer you know you’ll need a down payment, but there are several other costs you may not realize you should budget for. Here’s the lowdown on common closing costs Canadian first time homebuyers may overlook.

Lawyer’s and/or Notary Fees Plus GST

Lawyer’s prepare and register purchase documents and mortgage documents when you buy a home, and lawyers cost money! Depending on your province, expect to pay anywhere between $500 and $1500 in legal fees when you buy your first home, and don’t forget to add your provincial GST.

Disbursements and Adjustments

Along with the lawyers’ fees for their services, first time buyers should also budget for disbursements and adjustments. Disbursements are fees or charges lawyers incur on your behalf for things like government registration fees, search fees, and courier or mail fees.

Adjustments refer to calculations that account for expenses the home seller may have prepaid, such as property taxes or utilities.

Title Insurance

While it isn’t mandatory, title insurance protects you against losses related to your home’s ownership/title. On a new purchase of $500,000, your title insurance would cost about $300. Learn more about title insurance to decide if it’s right for you, and ask your lawyer for a quote on title insurance for your property.

Land Transfer Tax

Land transfer taxes and/or transfer fees on the purchase of a home vary by purchase price, province and if you’re in Ontario, even by regional location. Toronto first time homebuyers pay an additional municipal land transfer tax.

Some provinces such as Ontario and British Columbia offer a land transfer tax rebate for qualified first time homebuyers.

Estimate your taxes with’s handy Land Transfer Tax Calculator.

Home Inspection Fee

Before buying a house, many homebuyers today hire a home inspector to assess the operating and structural systems of a home. A home inspection may reveal potentially costly renovations and repairs that purchasers should know about before finalizing their agreement to buy. Depending on the home size and location, expect to pay between $300 and $500 for a home inspection in Canada.

While closing costs vary greatly depending on your situation, location, and purchase price, CMHC recommends budgeting between 1.5 and 4 percent of your home’s purchase price for closing costs.

Lastly, don’t forget house-specific costs such as buying appliances and utility hookup fees – they can quickly add up and take a bite out of your homebuying budget.

This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.

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