Closing Costs in Markham — The $60,000 Surprise Most Buyers Don’t See Coming

The most common financial shock in Markham real estate is not a rate hike or a bidding war. It is the closing cost statement that arrives from a buyer’s lawyer three weeks before closing — revealing $50,000 to $80,000 in costs that were not adequately planned for.

Michael John Lau, Markham’s top REALTOR® and CPA/CMA, builds the complete closing cost picture into every buyer’s financial planning before an offer is signed. Here is the complete breakdown so you are never surprised.

The Biggest Single Closing Cost — Ontario Land Transfer Tax

For a $1,200,000 Markham home, Ontario Land Transfer Tax (LTT) is the largest single closing cost — approximately $20,475. Ontario’s LTT is calculated on a sliding scale: 0.5% on the first $55,000, 1.0% on $55,000–$250,000, 1.5% on $250,000–$400,000, 2.0% on $400,000–$2,000,000, and 2.5% above $2,000,000.

First-time buyer rebate: first-time buyers in Ontario receive a rebate of up to $4,000 on the provincial LTT — reducing the effective LTT on a $1,200,000 Markham purchase from $20,475 to $16,475.

Legal Fees and Disbursements

Your lawyer handles title search, registration, statement of adjustments, and transfer. Legal fees for a standard Markham resale typically run $1,500 to $2,500 plus disbursements (title insurance, registration, search costs) of $500 to $1,500 — about $2,000 to $4,000 total. For new construction, fees are higher ($2,500 to $4,000 plus disbursements) because the builder’s closing documentation is more complex.

CMHC Mortgage Insurance Premium

If your down payment is under 20%, mortgage default insurance is mandatory. Premiums are a percentage of the insured mortgage: 5–9.99% down = 4.00%; 10–14.99% = 3.10%; 15–19.99% = 2.80%. On a $1,000,000 home with 10% down ($100,000), the $900,000 insured mortgage carries a 3.10% premium of $27,900 — added to your mortgage balance (about $150/month more) rather than paid at closing, adding roughly $15,000–$20,000 in interest over the term. For homes above $1,500,000, insurance is unavailable — a 20% minimum down payment is required.

Property Tax Adjustment

If the seller prepaid property taxes, you reimburse them for the portion of the year after closing. On a $1,200,000 Markham home with annual taxes of about $8,400 (blended rate 0.700278%), the daily rate is roughly $23. Closing September 15 means reimbursing about $3,335 for the 146 remaining days — shown on your closing statement.

The Smaller Out-of-Pocket Costs

• Home inspection: $450 to $700 — non-negotiable on a resale, paid before closing.
• Title insurance: $200 to $400 — mandatory for virtually all mortgage-financed purchases.
• Moving, utilities, setup: $1,500 to $5,000 for a local move, plus utility deposits, connection fees, and lock rekeying in the first week.

New Construction Closing Costs — The Additional Layer

Pre-construction buyers face items resale buyers do not:

• HST adjustment: new homes are subject to 13% HST. The HST New Housing Rebate (up to $130,000 for agreements signed before March 31, 2027) offsets most or all for eligible buyers — but HST is calculated on the full price and the rebate is applied after closing, so you must fund the full amount at closing and recover the rebate through the CRA.
• Development charge adjustment (if uncapped): uncapped DCs can add tens of thousands to your closing statement.
• Occupancy fees: between move-in and legal closing, you pay the builder occupancy fees (typically $1,500–$3,500/month on an $800,000–$1,000,000 condo) — for six to eighteen months.
• Utility connections, meter charges, Tarion enrolment fees: small but real additional costs.

The Complete Closing Cost Budget

For a $1,200,000 Markham resale (non-first-time buyer): LTT $20,475 + legal $3,000 + inspection $600 + title insurance $300 + tax adjustment $2,000–$4,000 + moving $2,500 = approximately $30,000 to $35,000 including incidentals. For a first-time buyer with the $4,000 rebate: about $26,000 to $31,000.

For a new construction purchase at $900,000, add the occupancy fee period ($18,000–$40,000 over 6–12 months), HST funding requirement, and DC exposure — new construction closing costs can total $50,000 to $90,000 beyond a standard resale on comparable values.

Plan for 3% to 5% of your purchase price in closing costs as a conservative budget — $36,000 to $60,000 on a $1,200,000 home, on top of your down payment. This is the number most buyers underestimate, and knowing it before you buy is the difference between a smooth closing and a financial emergency. Michael John Lau, Markham’s top REALTOR®, provides a complete closing cost estimate for every buyer client before any offer is signed.

Frequently Asked Questions

How much are closing costs in Markham?

Budget 3–5% of the purchase price. A $1,200,000 Markham resale runs roughly $30,000–$35,000 (land transfer tax, legal fees, inspection, title insurance, tax adjustment, moving). New construction can total $50,000–$90,000 more once HST funding and occupancy fees are included.

Does Markham charge a municipal land transfer tax like Toronto?

No. Markham buyers pay only the Ontario Land Transfer Tax — about $20,000 on a $1,200,000 home. Toronto adds a second municipal LTT on top, roughly doubling it to ~$40,000. That ~$20,000 gap makes Markham more affordable at the closing table.

What is the first-time buyer land transfer tax rebate in Ontario?

First-time buyers receive up to $4,000 off the provincial Land Transfer Tax. On a $1,200,000 Markham home, that reduces LTT from about $20,475 to $16,475.

What extra closing costs do new construction buyers pay in Markham?

Beyond resale costs: HST (with a rebate of up to $130,000 applied after closing, so you fund it upfront), potential uncapped development charges, and occupancy fees of $1,500–$3,500/month for 6–18 months between move-in and legal closing.