What Are Closing Costs and How Much Should You Budget?
Closing costs are the fees and expenses you pay on or before your possession date, above and beyond your down payment. In Calgary and across Alberta, I typically advise buyers to budget between 1.5% and 4% of the purchase price for closing costs. On a $600,000 home, that's roughly $9,000 to $24,000. The range is wide because your situation — whether you're a first-time buyer, using CMHC insurance, or purchasing a new build — significantly changes what you'll owe.
Legal Fees and Disbursements
In Alberta, you must hire a real estate lawyer to complete your purchase. This isn't optional. Legal fees in Calgary typically run between $1,200 and $2,000, plus disbursements (title searches, couriers, registration fees, etc.) that can add another $400 to $700. Shop around, but don't choose your lawyer based on price alone — a good real estate lawyer protects you from title issues that could cost you far more down the road.
Land Title Transfer Fees
Alberta charges a fee to transfer the land title into your name. This is calculated on a tiered scale based on the property's fair market value. For a $600,000 home, expect to pay approximately $600 to $900 in land transfer fees. Unlike Ontario or British Columbia, Alberta does not charge a provincial land transfer tax — which is genuinely one of the perks of buying here.
CMHC Mortgage Insurance (If Applicable)
If your down payment is less than 20% of the purchase price, you're required to carry CMHC mortgage default insurance. The premium is calculated as a percentage of your mortgage amount:
- 5% to 9.99% down payment: 4.00% premium
- 10% to 14.99% down payment: 3.10% premium
- 15% to 19.99% down payment: 2.80% premium
The good news is this premium is almost always added directly to your mortgage rather than paid out of pocket on closing day. However, in Alberta you will also pay GST on the CMHC premium, and that GST portion must be paid in cash at closing. On a $24,000 premium, that's $1,200 in GST you need ready to go.
Home Inspection
I strongly recommend every buyer get a home inspection, even in a competitive market. In Calgary, a qualified home inspector typically charges between $450 and $700 depending on the property size. This is money you pay before possession, usually within days of your offer being accepted. Think of it as the best few hundred dollars you'll ever spend.
Property Tax Adjustment
Calgary property taxes are paid annually, but on your possession date your lawyer will calculate a property tax adjustment. If the seller has prepaid taxes beyond your possession date, you'll reimburse them for that period. If they haven't paid yet and you're taking possession mid-year, they'll credit you. This adjustment can swing either direction, but budget $500 to $2,000 as a buffer — especially if you're taking possession in the first half of the year.
Condo Reserve Fund and Estoppel Certificate Fees
Buying a condo in Calgary? Your lawyer will order an estoppel certificate (sometimes called a status certificate in other provinces) from the condo corporation. This document outlines the financial health of the building, any outstanding assessments, and your condo fees. The fee for this document is typically $150 to $300 and is paid by the buyer. This is non-negotiable — never buy a condo without reviewing it.
Title Insurance
Most Calgary lawyers will recommend title insurance as part of your closing. It protects you against issues like fraud, encroachments, or errors in public records that weren't caught during the purchase process. Expect to pay a one-time premium of $200 to $400. It's absolutely worth it.
Moving Costs and Immediate Expenses
Technically not a "closing cost," but I always remind buyers to factor in moving expenses, utility hook-up deposits, and those first-week purchases (new locks, touch-up paint, shelf liners — it adds up fast). Budget at least $1,500 to $3,000 for this transition period so you're not scrambling after possession day.
My Top Tips to Manage Closing Costs
- Ask your lender early. Request a full closing cost estimate before you start shopping — not the week before possession.
- Keep liquid cash available. Your down payment is not your closing cost fund. These are separate amounts.
- Check your FHSA and RRSP Home Buyers' Plan. If you're a first-time buyer, you may have access to tax-sheltered savings that can help cover these costs.
- Don't skip the lawyer review. A $200 estoppel certificate or $400 title insurance policy can save you from a $50,000 headache.
- Talk to your REALTOR® before you write the offer. I walk every one of my buyers through a full cost estimate customized to their situation before we submit anything.
Buying a home in Calgary is one of the biggest financial decisions you'll make. The more clearly you understand what possession day actually costs, the more confidently you can make an offer. If you have questions about closing costs or want a personalized estimate for your situation, I'm always happy to walk you through it — no obligation, no pressure.
