Humber/Ontario Real Estate Course 3 Exam Practice

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Which is not a typical closing cost for a residential resale home?

  1. Adjustments for Property Taxes

  2. Title Search and Document Fees

  3. Harmonized Sales Tax

  4. Land Transfer Tax

  5. Home Inspection Fee

  6. Legal Fees

The correct answer is: Harmonized Sales Tax

The correct choice is Harmonized Sales Tax, as it is not typically applicable to the resale of residential homes in Ontario. In general, residential resale homes are exempt from HST; therefore, buyers do not pay this tax when purchasing such properties. The other costs listed are standard aspects of closing a real estate transaction. Adjustments for property taxes reflect the yearly tax obligations that the new owner will assume, with prorations necessary at closing. Title search and document fees are related to the verification of property ownership and the formalization of ownership documents. Land transfer tax is a compulsory fee that buyers must pay when transferring property ownership, and legal fees are incurred for the services of a lawyer in facilitating the transaction. Additionally, while not universally required, a home inspection fee is often recommended to assess the condition of the property before purchase.

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