One of the most common surprises for first-time homebuyers in Ottawa is the gap between the purchase price they agreed to and the total amount of cash they need on closing day. Closing costs — the fees, taxes, and adjustments payable in addition to your down payment — typically range from 1.5% to 4% of the purchase price. On a $700,000 home in Kanata or Barrhaven, that can mean $10,500 to $28,000 in additional costs you may not have fully budgeted for. Here is a complete breakdown of every item you should expect to pay when buying a resale property in Ottawa in 2026.
Ontario Land Transfer Tax
The single largest closing cost for most buyers is the Ontario Land Transfer Tax (LTT). This is a provincial tax payable on every purchase of land in Ontario. The tax is calculated on a sliding scale based on the purchase price:
- 0.5% on the first $55,000
- 1.0% on the portion between $55,000 and $250,000
- 1.5% on the portion between $250,000 and $400,000
- 2.0% on the portion between $400,000 and $2,000,000
- 2.5% on any portion above $2,000,000
For a $700,000 purchase, the Ontario LTT calculation works out as follows: 0.5% of $55,000 = $275; 1.0% of $195,000 = $1,950; 1.5% of $150,000 = $2,250; 2.0% of $300,000 = $6,000. Total: $10,475.
Note that Ottawa does not have a municipal land transfer tax — unlike Toronto, where buyers pay a second, equivalent tax on top of the provincial one. This makes Ottawa meaningfully more affordable from a tax perspective.
First-Time Home Buyer Rebate
If you are a first-time homebuyer, you may qualify for a full or partial refund of the Ontario LTT. The rebate is a maximum of $4,000, which fully eliminates the LTT on purchases up to approximately $368,000. To qualify, you must be a Canadian citizen or permanent resident, at least 18 years of age, you must intend to occupy the property as your principal residence within nine months, and you must never have owned a home anywhere in the world previously. If you are purchasing with a spouse or partner who has previously owned a home, your rebate will be reduced.
Legal Fees and Disbursements
In Ontario, a real estate transaction must be completed by a lawyer. Legal fees for a standard residential purchase in Ottawa typically range from $1,200 to $2,000 plus HST. In addition to the fee, your lawyer will charge disbursements — out-of-pocket costs incurred on your behalf — which commonly include:
- Title search and off-title search fees ($200–$400)
- Ontario government land registration fee (based on the purchase price)
- Bank document preparation fees if a mortgage is involved
- Courier, postage, and printing costs
When comparing law firms, ask for a quote that includes both the professional fee and an estimate of disbursements, as disbursements can add $500–$1,000 or more to the total cost.
Title Insurance
Title insurance is a one-time premium that protects you and your lender against defects in title that may not appear in a standard title search — such as encroachments, survey discrepancies, zoning violations, fraud, and certain off-title matters. Most lenders in Ontario require title insurance. The premium for a residential property in the $700,000 range is typically $250–$450 from providers such as FCT or Stewart Title. It is a relatively small cost for significant peace of mind.
Home Inspection
A home inspection, typically costing $450–$700 in the Ottawa area, is not a closing cost strictly speaking — it is usually done before you waive your condition. However, it is a critical pre-purchase cost that can save you from buying a property with major deficiencies. Many buyers in competitive markets have waived home inspection conditions in recent years; this is a risk you should discuss carefully with your lawyer and realtor before deciding.
Adjustments
On the closing statement prepared by your lawyer, you will see a category called "adjustments." These are amounts that are apportioned between buyer and seller based on the closing date. Common adjustments include:
- Property taxes: If the seller has prepaid taxes for the year, you will reimburse them for the portion attributable to your ownership period.
- Prepaid utilities or condo fees: If applicable.
- Oil or propane: If the property has a tank, you pay the seller for the fuel remaining on closing day.
Adjustments can be a credit or a debit depending on the circumstances. Your lawyer will review and explain the statement of adjustments before closing day.
Mortgage Default Insurance (CMHC)
If your down payment is less than 20% of the purchase price, your mortgage is considered "high-ratio" and you are required by federal law to purchase mortgage default insurance through Canada Mortgage and Housing Corporation (CMHC) or a private insurer such as Sagen. The premium ranges from 2.8% to 4.0% of the insured mortgage amount, depending on the loan-to-value ratio. This premium is typically added to your mortgage balance rather than paid as a cash closing cost — but it does increase the total cost of your home over the amortization period. Note that properties over $1.5 million are not eligible for insured financing.
Other Costs to Budget For
- Moving costs: $1,000–$3,000+ depending on distance and volume.
- Utility setup and deposits
- Immediate repairs or upgrades identified in the home inspection
- HST: If you are buying a new construction home, HST applies (see our article on new construction). Resale homes are generally exempt from HST.
What Your Lawyer Does on Closing Day
Your real estate lawyer plays a central role on closing day. They receive mortgage funds from your lender, review and sign all transfer documents, pay the seller's lawyer and discharge any existing mortgages on the property, register the transfer of title in your name at the Land Registry Office, and register your new mortgage. They then provide you with a reporting letter outlining everything that happened and deliver your keys through the seller's agent.
At Silver Crest Law, we act for buyers in Ottawa-area real estate transactions and are committed to ensuring your closing is smooth, transparent, and properly documented.
This article provides general legal information about real estate closing costs in Ontario as of 2026. Tax rates and rebate thresholds may change. This does not constitute legal advice. Consult a real estate lawyer before completing a property purchase.