Section 07
Closing costs on a new build: what to budget for
Last reviewed October 30, 2026
Closing costs on a new home include everything a resale purchase has, plus a set of "adjustments" that appear in the builder's agreement and are easy to overlook when you sign. Here's what to expect, and what to ask for before you commit.
Costs every buyer pays
Ontario land transfer tax
Payable on registration of your purchase. Ontario's land transfer tax is calculated on a sliding scale based on price. London has no municipal land transfer tax, unlike Toronto. First-time buyers may qualify for a refund of up to $4,000. As an example of the provincial calculation for a single-family home, on a $600,000 purchase:
| Portion of price | Rate | Tax |
|---|---|---|
| First $55,000 | 0.5% | $275 |
| $55,000 to $250,000 | 1.0% | $1,950 |
| $250,000 to $400,000 | 1.5% | $2,250 |
| $400,000 to $600,000 | 2.0% | $4,000 |
| Total | $8,475 (or $4,475 after a full $4,000 first-time buyer refund) |
Rates per the Government of Ontario's land transfer tax schedule. Confirm current rates at ontario.ca.
Legal fees and disbursements
New-build closings involve more review than resale (the agreement, the Addendum and the statement of adjustments), so legal fees are often a bit higher. Get a quote that covers the whole new-build process.
Title insurance, mortgage costs and insurance
Title insurance, any lender fees or appraisal costs, mortgage default insurance premiums (added to the mortgage, though the PST on the premium is payable at closing), and home insurance.
New-build adjustments
These show up on the statement of adjustments your lawyer receives from the builder before closing. Which ones apply, and whether they're capped, depends entirely on your agreement.
| Adjustment | What it is | What to ask |
|---|---|---|
| Development charges / levies | Municipal charges for infrastructure. Usually included in the price, but increases after signing may be passed on | Are increases capped? At what amount? |
| Utility connection & meter fees | Water meter, hydro connection, gas connection | Fixed amounts or "at cost"? Capped? |
| Tarion enrolment fee | The fee to enrol the home in the warranty program, often passed to buyers | Included or extra? |
| HST rebate adjustments | If you don't qualify for a rebate the builder assumed, you'll pay it at closing | Which rebates are assumed? See rebates |
| Property tax | Your share from the closing date; new homes may get interim and supplementary tax bills | How will taxes be adjusted? |
| Grading / landscaping deposits | Some builders hold back funds until final grading is certified | Is a deposit held? When is it returned? |
| Upgrades balance | Any upgrade costs not already paid | Total owing at closing |
| Condo-specific items | Reserve fund contribution, common expenses, occupancy fees | Which of these apply, and how much? |
The biggest avoidable surprise: uncapped adjustments. Ask your lawyer to negotiate caps on development charge increases and other "at cost" items before the agreement becomes firm. Once signed, it's too late.
Supplementary property tax bills
New homes are often assessed in stages. You may first be taxed on the land, then receive a supplementary or "omitted" assessment bill once the house is assessed by MPAC, the Municipal Property Assessment Corporation, sometimes many months after you move in. It can be a large one-time bill covering the period since you took possession. Ask your lawyer how taxes will be handled, and set money aside.
Costs after closing that buyers forget
- Window coverings, light fixtures (if not included), and appliances
- Fencing, decks and landscaping, which are often not included or only basic
- Driveway paving, if it's finished later and not included
- Moving costs and possible storage if dates shift
- Furniture for a larger home
When each cost hits
- At signing and during construction: deposits and any upgrade payments.
- A few weeks before closing: your lawyer receives the statement of adjustments. Review it together, and query anything you don't recognise.
- On closing day: the balance of the price, land transfer tax, adjustments, legal fees and disbursements.
- In the months after: supplementary property tax bills, landscaping, fencing and any finishing work.
A simple budgeting approach
Many buyers set aside a percentage of the purchase price for closing costs and adjustments on top of the down payment, plus a separate fund for post-closing items like window coverings and landscaping. Your lawyer can estimate the closing costs for your specific agreement. Ask for that estimate early, not the week before closing.
Your local agent
Bring someone on your side to the sales centre
The people at a builder's sales centre work for the builder. A buyer's agent works for you. They can compare the builder's pricing with resale homes nearby, flag clauses for your lawyer, and help you decide which upgrades are worth it.
We recommend Rayna Elabed, a Sales Representative with CENTURY 21 First Canadian Corp., Brokerage, in London. She can help you weigh new construction against resale listings across the city. Many builders expect your agent to be with you, or registered, on your first visit, so contact her before you go.
Contact Rayna & browse listings