When budgeting for a new construction home in the Orillia, Muskoka, or Simcoe County corridor, many buyers focus on the purchase price and down payment. But closing costs -- the fees and charges due on or before closing day -- can add thousands of dollars to the total amount you need. Understanding these costs in advance prevents surprises and helps you plan your finances accurately.

This guide breaks down every significant closing cost that applies to a new construction home purchase in Ontario, with notes on which costs are specific to new builds and which apply to all property transactions.

Ontario Land Transfer Tax

Land Transfer Tax (LTT) is the single largest closing cost for most buyers. It is payable on closing day and calculated on a tiered scale based on the property's purchase price:

Example Calculations

To illustrate how LTT adds up at different price points common in the Orillia corridor:

First-Time Buyer Refund

If you have never owned a home anywhere in the world, you may qualify for the Ontario first-time buyer LTT refund of up to $4,000. This effectively eliminates the LTT on the first $368,333 of your home's value. For a first-time buyer purchasing a $600,000 home, the refund reduces the LTT from approximately $8,475 to approximately $4,475.

An important advantage of buying in the Orillia corridor: unlike Toronto, there is no Municipal Land Transfer Tax here. Toronto buyers pay a second LTT on top of the provincial one, which doubles the tax burden. Buying in Orillia, Severn, Gravenhurst, or anywhere else in the corridor means you only pay the single provincial LTT.

Legal Fees and Disbursements

You will need a real estate lawyer to handle the closing. A lawyer's role includes reviewing the Agreement of Purchase and Sale, conducting title searches, registering the mortgage, handling the transfer of funds, and ensuring the transaction complies with all legal requirements.

What to Expect

New construction closings can be slightly more complex than resale because they involve reviewing builder-specific agreements, Tarion enrolment, and potentially occupancy versus title closing structures. Make sure your lawyer has experience with new-build transactions in Ontario.

Title Insurance

Title insurance protects you and your lender against title defects, survey issues, fraud, and certain other risks related to the ownership of the property. Most lenders require it, and most lawyers recommend it even when the lender does not.

Title insurance is an alternative to an up-to-date land survey, which can cost $1,500 or more. For new construction, the builder typically provides a survey or reference plan, but title insurance is still standard practice.

HST on New Homes

New construction homes in Ontario are subject to the Harmonised Sales Tax (HST) at 13 percent (5 percent federal and 8 percent provincial). This is one of the most significant differences between buying new and buying resale -- resale homes are exempt from HST.

How It Works in Practice

Most builders in the Orillia corridor include the HST in their advertised purchase price and structure the transaction so that the buyer assigns the HST New Housing Rebate back to the builder at closing. This means you generally do not pay a separate lump sum for HST on closing day.

However, you should understand the conditions:

Read our comprehensive Ontario HST rebate guide for full details on eligibility and amounts.

Mortgage Default Insurance

If your down payment is less than 20 percent of the purchase price, Canadian law requires you to purchase mortgage default insurance through CMHC, Sagen, or Canada Guaranty. This insurance protects the lender (not you) in case of default, but the cost is borne by the borrower.

For example, on a $500,000 home with a 5 percent down payment ($25,000), the insured mortgage of $475,000 would attract a 4.00 percent premium of $19,000, bringing the total mortgage to $494,000. With a 10 percent down payment, the premium drops to 3.10 percent.

Costs Specific to New Construction

The following costs apply specifically to new-build purchases and are outlined in the builder's Agreement of Purchase and Sale. Review these carefully with your lawyer during the 10-day cooling-off period.

Development Levies and Charges

Municipalities charge development charges to builders to fund infrastructure -- roads, sewers, water systems, parks, and community facilities required by new development. Builders may pass some or all of these charges through to buyers. The amount varies by municipality and can be several thousand dollars. Some builders cap these in the APS; others pass through the actual amount charged by the municipality at the time of closing.

Utility Connection Fees

New homes require connections to municipal water, sanitary sewer, storm sewer, electricity, and natural gas (where available). Connection and meter installation fees vary by municipality and utility provider. Budget $500 to $2,500 depending on the services required and the municipality's fee schedule. These costs are sometimes included in the builder's price and sometimes charged separately -- check the APS.

Tarion Enrolment Fee

Builders pay an enrolment fee to Tarion for every new home, which funds the warranty program. This fee is sometimes passed through to the buyer as a closing cost. The amount depends on the home type and value. Review your APS to see whether this is included in the purchase price or charged separately.

Lot Grading and Landscaping Deposits

Many builders require a deposit (often $2,000 to $5,000) to ensure the homeowner maintains the lot grading established during construction. Altering the grading can affect drainage on your lot and neighbouring properties. The deposit is typically returned after a municipal inspection confirms the grading is intact, usually 12 to 24 months after closing.

Occupancy Fees (Condominiums and Some Freehold)

If you take occupancy before the builder registers the title (common in condominium buildings and some phased freehold developments), you may pay monthly occupancy fees. These fees typically cover the mortgage interest on the remaining balance, property taxes, and common element fees. Occupancy fees end when the title is registered and your mortgage begins. This arrangement is more common in condominium purchases than in freehold homes in the corridor.

Upgrades and Extras

Selections made at the builder's design centre -- upgraded countertops, hardwood flooring, extended cabinets, finished basements, and similar extras -- are typically payable before or at closing. Confirm the payment schedule and amounts in your APS, as some upgrades require deposits during construction and the balance at closing.

Standard Closing Costs (New and Resale)

The following costs apply to all property purchases in Ontario:

Home Inspection

While new homes come with a Tarion warranty, many buyers still choose to hire an independent home inspector for the Pre-Delivery Inspection (PDI). A qualified inspector can identify issues you might miss. Cost: $400 to $600 for a standard single-family home.

Property Tax Adjustment

If the builder has prepaid property taxes beyond the closing date, you will reimburse the builder for the portion covering the period after you take ownership. This is a standard closing adjustment handled by the lawyers. The amount depends on the annual property tax and the closing date within the tax year.

Estoppel Certificate (If Applicable)

If the new home is part of a condominium corporation, the builder or condominium corporation provides an estoppel certificate confirming the financial status of the unit. The fee is typically $50 to $100.

Moving Costs

Not technically a closing cost, but a real expense that should be in your budget. Professional movers for a local move in the Orillia area typically cost $1,000 to $2,500 depending on the size of the home and distance. Long-distance moves from the GTA will cost more.

Putting It All Together

Here is a representative closing cost breakdown for a $600,000 new construction home in the Orillia corridor, assuming a non-first-time buyer with a 20 percent down payment:

A first-time buyer at the same price would save up to $4,000 through the LTT refund, bringing the estimated total closer to $10,000 to $11,000 (plus any builder-specific levies in the APS).

How to Prepare

To avoid surprises on closing day:

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