There are many costs that come with the purchase of a home in Ottawa. Closing costs, however, are often overlooked by first-time homebuyers and can be an additional $10-30 thousand dollars on top of your down and mortgage payments.

Wouldn’t it be nice to know about these fees before they surprise you when you’re ready to close on your new home? We’ll break down all the closing costs you need to know before you buy.


With many homes in Ottawa selling for over asking price or ending in bidding wars, you must know your bottom-line budget before going in to avoid making emotional decisions that you may come to regret.

In calculating what that magic number is, you should also consider the extra costs associated with buying a home, many of which need to be paid upfront.


Home Inspection

While having a home inspection is optional and an added cost, it can save you money in the long run. Finding out after the fact that your new home is not structurally sound or needs a new roof can create far more financial hardship than the cost of an inspection.

The cost of a home inspection is small – in the hundreds of dollars – relative to the investment you’re making. An inspection can also help you factor in any major upgrades that will need to be done after purchasing your home or can be used to negotiate down the price based on those projected costs.

Septic Inspection and Water Tests

If you’re buying a home with a septic system and well, having the septic system inspected and the water tested is recommended.

The cost of replacing a septic system varies depending on the size of the home and other factors, but it is in the tens of thousands of dollars, so, again, investing in an inspection before you buy is money well spent.

Given the importance of having a home inspection, you want to ensure you find an inspector who’s reliable and thorough.

Having access to a network of professionals is one of the reasons for having a buyer’s agent. At MacDonald Property Group, we have years of experience dealing with home inspectors and can refer you to professionals whose reputation we trust.

Appraisal and Land Survey

Your mortgage lender may require a home appraisal and/or a property survey before approving your mortgage. The lender wants to ensure that the property is worth the amount of money they’re lending you.

The appraisal and survey may not be required in some cases. For example, if your down payment is less than 20% of the purchase price, the bank may not require an appraisal, and the loan will be insured.

The appraisal of your home for mortgage loan approval is unrelated to the appraisal of your home that appears on your property tax notice.

Most lenders require a recent land survey. If the current owner doesn’t have one available, it will add one or two thousand dollars to your closing costs.

Once you’ve completed any pre-purchase inspections and had your mortgage approved, there are additional fees associated with closing the deal.


Land Transfer Tax 

Land transfer tax is one of the most significant expenses you’ll face when purchasing a home, and as average home prices increase, so too does the land transfer tax.

The formula for calculating that tax for properties bought in Ontario can be found here. Note that rebates are available for first-time homebuyers.

Legal Fees and Disbursements

When you purchase a home, having a lawyer is mandatory in Ontario and should cost between $500 and $2000, depending on where you live. As with home inspectors, MacDonald Property Group can direct you to lawyers with whom previous clients have been happy.

The lawyer will ensure that your rights are protected and that all documentation is in proper order. They will also do a title search on your home. Title insurance may also be purchased through your lawyer, who can advise you on whether or not it’s required.

Estoppel Certificate Fee 

An Estoppel certificate will cost you a couple of hundred extra dollars if you’re buying a condo. It’s optional but will confirm that the condo does not have any claims, liens or charges against it.

PST on CMHC Mortgage Insurance

If your down payment on your new home is less than 20 percent of the purchase price, you’ll be required to purchase CMHC mortgage loan insurance.

The insurance cost can be included in your monthly mortgage payment calculation, but the Provincial Sales Tax on that insurance must be paid up-front. In Ontario, that would amount to eight percent of the insurance premium.


While that covers all the real estate fees, you’ll also need to set aside enough to pay for utility hook-up fees, adjustment fees for utilities, property tax or condo fees (if the previous owner has prepaid them, you will need to pay the pro-rated amounts), and property insurance, which must be in place by closing day.

If, after reading this, you still have questions about any of these costs associated with your home purchase, get in touch, and we’ll be happy to talk you through them.

Buy and sell with confidence. Choose MacDonald Property Group.

At The MacDonald Property Group, we have a dedicated, national award-winning full-service team all under one roof, ready to provide the expertise you can trust. Our team and associates are recognized as the top 1% in North America since 2010.

With over twenty-five years of experience in all aspects of real estate, we have bought and sold well over a thousand homes. We’ve been honoured to help thousands of clients in Barrhaven and across the Ottawa area close a deal with confidence and satisfaction. Give us a shout, and let us show you what we can do for you!