Ownership
What your closing costs say about your home's assessed value
Land transfer tax, title insurance, and adjustments are all calculated off a number — and that number isn't always the same as market value.
January 22, 2026 · 6 min read
Every line item on a Toronto closing statement is tied to a dollar figure somewhere: the purchase price, the assessed value, or an appraised value ordered by the lender. Homeowners rarely stop to notice that these numbers can differ, but understanding which figure drives which cost clarifies a lot about how your property is valued from different angles.
Purchase price versus assessed value
Land transfer tax is calculated on the purchase price, not on MPAC's assessed value or any appraisal. That's why two nearly identical homes on the same street can carry very different transfer tax bills if one sold years ago at a lower price and hasn't changed hands since — the tax bill reflects a transaction number, not current market value.
Where appraised value enters the picture
If your lender orders an appraisal as part of financing, that appraised value determines your loan-to-value ratio and whether mortgage default insurance applies. It has no bearing on land transfer tax, but it directly affects your down payment requirements and, in some cases, your interest rate tier.
- Land transfer tax: based on purchase price
- Mortgage insurance and rate tier: based on appraised value
- Property tax: based on MPAC's assessed value
- Title insurance premium: often based on purchase price or loan amount
Why three numbers rarely match
MPAC assessments lag the market by design, often reflecting values from years earlier. A lender's appraisal reflects a point-in-time market read. And your purchase price reflects whatever negotiation happened between two specific parties on one specific day. None of these numbers is wrong — they're just measuring different things for different purposes.
Using this to understand your own home
If you're trying to figure out what your home is actually worth today, none of these three figures alone will give you the answer. A current market valuation, built from recent comparable sales and today's buyer conditions, is the only number that reflects what your home would likely sell for right now.