Homes - Real Estate

The hidden costs of buying and selling a house

Find out what additional costs you should expect when buying or selling a house.

The actual purchase price on a house listing is only part of the ultimate cost of buying or selling it. Whenever a house changes hands, there are a number of associated fees -- some of them amounting to thousands of dollars -- that affect the final price of the transaction, whether you are buying a new home or selling your old one.
We asked Toronto real estate lawyer Stanley Clapp to give us a rundown of what extra fees to expect, and how much you can expect to be out of pocket.

Land Transfer Tax
Many provinces (and most major cities) levy a land transfer tax (sometimes called a property purchase tax) that is calculated as a percentage of the purchase price. The formula varies from province to province and from city to city; for specifics, see the website relocate–  for a list of land transfer tax rates for most Canadian provinces, consult the municipal/provincial government website for your region, or ask your lawyer or agent.
As an example, in Ontario, the Land Transfer Tax is calculated as follows:

  • on the first $55,000: 0.5%
  • from $50,000 to $250,000: 1%
  • from $250,000 to $400,000: 1.5%
  • over $400,000: 2%

First-time buyers receive an exemption of $2,000.
The City of Toronto's Land Transfer Tax is calculated on the following scale:

  • on the first $55,000: 0.5%
  • from $50,000 to $400,000: 1%
  • over $400,000: 2%

First-time buyers receive an exemption of $3,725.
Adjustment costs

Adjustment costs are any prepaid costs paid by the vendor that are to be reimbursed when the buyer takes possession of the home. These can include property taxes; prepaid water, hydro or gas charges; lawn care service contracts, and so on.
With metered services such as hydro, gas or water, the meters are read on the day the house changes hands, to enable you (and the utility company) to verify how much the buyer and seller each owe or are owed.
The exception is heating oil; it is standard for the seller to top up the tank of heating oil at the time of the sale, and have the buyer pay for one full tank.


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