A Simple Guide for Home Buyers, Sellers, and Refinancers in Ontario
When you’re closing on a home in Ontario, your lawyer will likely give you a quote that includes two main parts: the legal fee and something called disbursements.
That second word—disbursements—often makes people pause. It sounds complicated and might make you think you’re being charged hidden fees. But don’t worry—disbursements aren’t some sneaky extra. They’re just the costs your lawyer pays to other people and services (like the government or banks) to complete your real estate deal properly.
Let’s break it down.
Legal Fees vs. Disbursements: What’s the Difference?
Legal Fee:
This is what you pay your lawyer for their time, work, and advice. It covers everything they do personally for your deal—like reviewing documents, giving you legal guidance, and managing the risks. Legal fees can vary depending on how complex your situation is. You’ll also pay HST (tax) on this amount.
Disbursements:
These are out-of-pocket expenses your lawyer pays on your behalf to third parties—like the land registry office, the bank, or the city. These costs are passed on to you at the exact amount—lawyers are not allowed to add any markup.
Common Disbursements When Buying a Home in Ontario
If you’re buying a home, here are some typical disbursements you’ll see on your closing bill:
- Land Transfer Tax:
This is usually the biggest disbursement. It’s a provincial tax based on your purchase price. If you’re buying in Toronto, there’s a second municipal land transfer tax. - Title Search:
Your lawyer uses a system called Teranet to check who owns the property and whether there are any debts or issues tied to it. This costs anywhere from $36 to $125. - Writ/Execution Search:
This checks if the seller owes money from a court judgment. It costs around $13 to $70 per name. - Registration Fees:
When your lawyer registers the home in your name and your mortgage with the province, the government charges $84.23 each (one for the transfer, one for the mortgage). - Title Insurance:
A one-time insurance policy that protects you from title problems or fraud. It usually costs $250 to $400. - Municipal Tax Certificate:
This confirms the property taxes are paid up. The cost depends on the city—about $55 in Mississauga, $88 in Toronto. - E-Closing Software Fee:
Lawyers often use secure platforms to handle paperwork digitally. These can cost $50 to $100. - Law Society Levy:
This is a fixed $65 fee charged on every purchase by the Law Society of Ontario. - Bank Wire or Certified Cheque Fees:
Your lawyer sends money through a bank wire or certified cheque, which may cost $15 to $75. - Courier, Printing, and ID Verification:
These small costs add up to $50 to $150 and cover mailing documents, printing legal papers, and verifying your identity, as required by law.
Disbursements When Selling a Home
Selling usually comes with fewer disbursements, such as:
- Mortgage Discharge Statement:
Your lender may charge $25 to $75 to send your lawyer the payoff amount. - Discharge Registration Fee:
To remove your mortgage from the title after it’s paid off—$84.23. - Courier or Wire Fees:
These cover sending documents and transferring funds quickly and securely.
What About Refinancing or Switching Lenders?
If you’re refinancing, your lawyer will handle both removing the old mortgage and registering the new one (each $84.23). You’ll also pay for a new title search, a tax certificate, and usually a title insurance policy. If you’re sticking with the same insurer, that policy might come at a lower rate.
Why Lawyer Quotes Can Vary
Not all disbursements are the same. Here’s why one lawyer’s quote might differ from another’s:
- City Fees Differ: Smaller towns charge less for things like tax certificates.
- Complex Properties: Condos or homes with multiple lots need more title pages.
- Different Banks: Some banks charge for every wire; others include them in a package.
- Software Tools: Some firms use premium software that costs more but makes the closing smoother.
How to Avoid Surprises on Closing Day
- Ask for a Detailed Estimate Early On
A good law firm will give you a full breakdown of fees and disbursements. - Watch for Generic “Admin” Fees
Small costs are normal, but large lump-sum charges should be explained. - Check for Double Registrations
You should see only two $84.23 charges if you have one transfer and one mortgage. - Use First-Time Buyer Rebates
You can save up to $4,000 provincially and another $4,475 in Toronto on the land transfer tax. - Ask About Virtual Closings
E-signing and online transfers can cut courier and printing costs.
Final Thoughts
Disbursements might sound complicated, but they’re simply the actual costs your lawyer pays to help close your deal safely and correctly. These aren’t hidden fees—they’re just the necessary steps to register your home, protect your title, and make everything official.
A transparent lawyer will always explain these costs and refund anything that wasn’t used. When you know what to expect, that “extra” line on your invoice becomes just another part of buying or selling a home—with no mystery attached.
Just remember: these prices can vary based on your location, lender, and lawyer—so always ask for a clear quote in advance and beware of unexpected add-ons.
