Definition
Closing costs are the additional expenses to budget for when buying a property, beyond the down payment. In Quebec, the main ones are:
- **Land transfer tax** (welcome tax): calculated on the sale price according to a progressive schedule. For a $500,000 property, expect approximately $5,500–7,500. - **Notary fees** (mortgage deed + deed of sale): $1,500 to $2,500 depending on complexity. - **Pre-purchase inspection**: $400 to $600. - **Title insurance** (optional): $150 to $400. - **Adjustments**: property taxes and fuel (heating oil, propane) prorated to the possession date. The seller has prepaid these charges; the buyer reimburses their share from the possession date onward. - **CMHC insurance premium** (if applicable): paid to the lender, often added to the mortgage balance (no cash required at closing).
Rule of thumb: budget 1.5% to 3% of purchase price in closing costs, in addition to the down payment.