Closing costs are the cash you need on top of your down payment. On a cottage they include a few items that city buyers never see, like water tests and septic inspections. Here is the full list, with real numbers where we have them and honest ranges where costs vary.
Total to budget
A common rule of thumb is 1.5 to 4% of the purchase price, including land transfer tax. On a $631,100 cottage, that is roughly $9,500 to $25,000. Where you land depends on the price, whether you need mortgage insurance, and how many inspections the property needs.
Ontario land transfer tax
Ontario charges land transfer tax on every property purchase, including cottages. It is calculated in brackets, like income tax.
| Portion of the price | Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000.01 to $250,000 | 1.0% |
| $250,000.01 to $400,000 | 1.5% |
| $400,000.01 to $2,000,000 | 2.0% |
| Over $2,000,000 (land with 1 or 2 single-family homes) | 2.5% |
For a cottage between $400,000 and $2,000,000, there is a shortcut: 2% of the price minus $3,525.
| Cottage price | Land transfer tax |
|---|---|
| $400,000 | $4,475 |
| $500,000 | $6,475 |
| $631,100 example | $9,097 |
| $809,900 example | $12,673 |
| $1,000,000 | $16,475 |
| $1,500,000 | $26,475 |
| $2,000,000 | $36,475 |
A step-by-step example
Here is how the $809,900 figure is built: 0.5% of the first $55,000 is $275. 1% of the next $195,000 is $1,950. 1.5% of the next $150,000 is $2,250. 2% of the remaining $409,900 is $8,198. Add them up and the total is $12,673.
Legal fees and title insurance
Ask the lawyer for a written quote identifying fees, tax, disbursements, title insurance and extra work for private access or waterfront issues. A rural purchase can require additional title, survey and servicing review.
Title insurance protects you and your lender against title problems such as fraud, unregistered easements or survey issues. It is often a few hundred dollars, and more on expensive properties. Quotes vary, so ask your lawyer.
Inspections specific to cottages
| Inspection | Cost to confirm | What it covers |
|---|---|---|
| Home inspection | $500 to $1,000 or more for rural properties | Structure, roof, electrical, plumbing, heating |
| Septic inspection | $250 to $500, more with a pump-out | Tank, bed and how the system is working |
| Well water bacteria test | Free through Public Health Ontario | E. coli and total coliforms |
| Water chemical test | Varies, private licensed lab | Minerals, metals and other chemicals |
| WETT inspection | a property-specific fee | Wood stove and chimney, often required by insurers |
Public Health Ontario tests private well water for bacteria free of charge, with results in up to 4 business days. A safe result has 0 E. coli per 100 mL and 5 or fewer total coliforms. It does not test for chemicals. Read our well, septic and water test guide and the cottage inspection checklist.
Talk to Jeff and Emily
Want a closing cost estimate for a specific listing? Send it to us and we will add it up for you.
Or call or text 416-628-9682
Surveys and the shore road allowance
On waterfront, ask your lawyer whether a survey exists and whether it shows the cottage, deck, dock and boathouse. Survey costs vary widely, so get a quote from an Ontario Land Surveyor if you need a new one.
A shore road allowance may separate the lot from the water. Have the lawyer establish its ownership and any encroachments. A purchase or closure can involve municipal approval, a survey, legal work and fees. Confirm the municipality’s current policy and timing; the existing dock is not proof of title or permission. See shore road allowances.
Mortgage insurance tax
If you put less than 20% down, your mortgage needs default insurance. The premium is added to your mortgage, but Ontario charges 8% retail sales tax on it, and that tax is paid in cash at closing. It cannot be added to the loan. On a $20,000 premium, that is $1,600 due at closing. See the cottage down payment guide for premium rates.
Adjustments, boats, docks and chattels
- Property tax and fuel adjustments. If the seller prepaid property tax or filled the propane tank, you reimburse their share at closing.
- Boats, docks and furniture. Spell out every chattel in the agreement. Boats and trailers are usually handled separately and may need their own paperwork.
- Insurance. Your lender needs proof of insurance before closing. Get a quote early. See cottage insurance in Ontario.
- Moving and setup. Utility hookups, internet installation and a first propane fill add up.
Closing cost checklist
- Ontario land transfer tax
- Legal fees and disbursements
- Title insurance
- Home inspection
- Septic inspection and pump-out
- Well water bacteria and chemical tests
- WETT inspection
- Survey, if needed
- Sales tax on any mortgage insurance premium
- Property tax and fuel adjustments
- Insurance for closing day
Add the total to your down payment to get the real cash you need. Run it through our closing costs calculator, then talk to us about the mortgage side.
Questions people ask
What are the closing costs on a cottage in Ontario?
How much is land transfer tax on a cottage in Ontario?
Do first-time buyers get a land transfer tax refund on a cottage?
Do you pay Toronto land transfer tax on a cottage?
How much does a septic inspection cost in Ontario?
Is well water testing free in Ontario?
Can mortgage insurance tax be added to my mortgage?
Sources
- Ontario: Calculating land transfer tax (checked 2026-10-12)
- Ontario: Land transfer tax refunds for first-time homebuyers (checked 2026-10-12)
- Public Health Ontario: Well water testing (checked 2026-10-12)
- Ontario: Testing and treating private water wells (checked 2026-10-12)
- Municipality of Trent Lakes: Shoreline road allowance closure application (checked 2026-10-12)
- Ontario: Retail sales tax on insurance and benefits plans (checked 2026-10-12)