Most buyers plan carefully for their down payment. Far fewer plan carefully for everything else that's due on closing day, and that gap catches people off guard more than almost anything else in the process.
The rule of thumb
A commonly used guideline is to budget roughly 1.5% to 4% of the purchase price for closing costs, on top of your down payment. On a $600,000 home, that's a range of about $9,000 to $24,000. Where you land in that range depends mostly on legal fees, adjustments, and whether you qualify for any rebates.
Land transfer tax
Ontario charges a provincial land transfer tax on every home purchase, calculated on a sliding scale based on price. Unlike Toronto, Ottawa doesn't add a separate municipal land transfer tax on top, so Ottawa buyers only pay the provincial portion.
First-time buyers may also qualify for a land transfer tax rebate, which can meaningfully offset this cost. Ask your lawyer to confirm the current rebate amount and whether you qualify, it's one of the easiest things to miss.
Legal fees
You'll need a real estate lawyer to handle the closing, review title, and register the transfer. Legal fees in Ottawa typically run somewhere in the range of $1,000 to $2,000, though it varies by firm and complexity of the transaction.
Title insurance
Most lawyers will recommend title insurance, a one-time cost that protects against certain title defects or fraud. It's usually a few hundred dollars and is often bundled into your legal fees.
Adjustments
On closing day, you'll typically reimburse the seller for anything they've prepaid on your behalf, like property taxes or utility deposits that cover a period after your possession date. This is normal and expected, but it's easy to forget it's coming if nobody mentions it upfront.
None of these costs are hidden fees. They're simply costs buyers rarely hear about until their lawyer sends the final statement.
What else to leave room for
Beyond the closing statement itself, it's worth setting aside a bit more for moving costs, an immediate repair or two, and simply furnishing a new space. None of that is a "closing cost" in the technical sense, but it's real money that leaves your account in the same few weeks.
The number to write down
A down payment is only part of the number you need saved. Land transfer tax, legal fees, title insurance, and adjustments add up fast, and knowing the range ahead of time means no surprises on closing day.
If you want a realistic estimate for your specific purchase price, I'm happy to walk through it with you.
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