What Are Closing Costs (and Why Should You Budget for Them)?

Most people know that buying a home comes with a down payment—whether it’s saved, gifted, or borrowed. But what often catches buyers off guard are the closing costs, which are the additional expenses you’ll need to pay on top of your down payment when the deal closes.

If you don’t plan for them, they can become a last-minute source of stress.

Let’s walk through what closing costs actually include, and how much you should expect to budget.

1. Deed Transfer Tax (Also Known as Land Transfer Tax)

This is usually the biggest closing cost, and it varies depending on the municipality. In Nova Scotia, deed transfer tax rates range from 1% to 1.5% of the purchase price.

Even though some municipalities charge less, it’s safest to budget for the full 1.5% to avoid surprises.

For example, if you're buying a $400,000 home:

• At 1.5%, that’s $6,000 due at closing.

2. Legal Fees

You'll need a lawyer to complete the transaction and register the property in your name. Legal fees for a standard purchase typically fall between $1,000 and $2,000, depending on the law office and complexity of the file.

This usually includes:

• Title search
• Document preparation
• Registration costs

3. Title Insurance

Most lenders will require title insurance, which protects against issues like fraud or unknown claims against the property. This is a one-time cost, typically around $250 to $400.

4. Property Tax and Utility Adjustments

If the seller has prepaid property taxes, oil for a tank, or other municipal charges, you’ll likely need to reimburse them for your portion as the new owner. This amount varies, but it’s something your lawyer will calculate and include in the final closing statement.

Common adjustments include:

• Property tax prepayments
• Oil or propane tanks (charged per fill)

5. Home Inspection (Optional but Highly Recommended)

Not technically a closing cost, but many buyers will do a home inspection before finalizing the purchase. This typically costs between $400 and $700, depending on the size and location of the home.

6. Appraisal (Sometimes Required)

If you’re using certain lenders or putting 20%+ down, an appraisal might be required. This usually costs $500+.

How Much Should You Budget Overall?

A good rule of thumb is to set aside 2% - 3% of the purchase price for closing costs. That should comfortably cover your deed transfer tax, legal fees, title insurance, and adjustments.

If you’re planning to buy a home and want help budgeting properly for everything involved, feel free to reach out.

Call or text (902) 402-9779, or visit www.gregmatthews.tmgbroker.com/apply.aspx to fill out a five-minute pre-approval form.