Originally published 2026-04-08. Targeted claim corrections and editorial dating: September 21, 2026. Any retained market estimates or neighbourhood opinions refer to the original publication period and are not September valuations, verified rankings or return forecasts. This is not a complete market revalidation.
What Is Land Transfer Tax?
Ontario land transfer tax generally applies when acquiring land. The value of consideration, exemptions and any available refunds must be assessed for the transaction by your lawyer. [2] Ontario calculation rules
If you're buying within the City of Toronto, you pay twice: once to the Province of Ontario and once to the City of Toronto — the only municipality in the province with its own municipal land transfer tax. That double-hit is why Toronto buyers consistently face some of the highest closing costs in the country.
How Ontario's Provincial Land Transfer Tax Is Calculated
Ontario's LTT uses a tiered marginal rate structure — similar to how income tax brackets work. Each slice of the purchase price is taxed at its corresponding rate. For land containing one or two single-family residences, the provincial marginal rates are:
| Purchase Price Portion | Provincial LTT Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,001 – $250,000 | 1.0% |
| $250,001 – $400,000 | 1.5% |
| $400,001 – $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
The 2.5% top tier, which applies to the portion of any purchase price over $2,000,000, was introduced to address luxury property transactions and has significant implications for buyers in Forest Hill, Rosedale, and the Annex — neighbourhoods where $2M+ homes are not uncommon.
Toronto's Municipal Land Transfer Tax
Toronto municipal land transfer tax is additional to Ontario tax. For properties containing one or two single-family residences, Toronto introduced higher marginal rates above $3 million effective April 1, 2026. Property classification and transaction date matter; use the official table rather than assuming municipal and provincial rates are identical. [3] Toronto rates
| Purchase Price Portion | Toronto MLTT Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,001 – $250,000 | 1.0% |
| $250,001 – $400,000 | 1.5% |
| $400,001 – $2,000,000 | 2.0% |
| Over $2M through $3M | 2.5% |
| Over $3M through $4M | 4.40% |
| Over $4M through $5M | 5.45% |
| Over $5M through $10M | 6.50% |
| Over $10M through $20M | 7.55% |
| Over $20M | 8.60% |
Toronto municipal land transfer tax does not apply solely because a property is in the broader GTA. Confirm the actual municipal boundary and any other applicable taxes with your lawyer; compare full transaction costs rather than a generic savings range.
Real Examples: What You'll Actually Pay
Example 1: $900,000 Purchase — Outside Toronto (Provincial Only)
Example 2: $900,000 Purchase — City of Toronto (Provincial + Municipal)
Example 3: $2,200,000 Luxury Purchase — City of Toronto
First-Time Home Buyer Rebates
If you are purchasing your first home, both the Province of Ontario and the City of Toronto offer partial rebates — meaning you get some of that tax back. Here's how each program works:
Ontario First-Time Home Buyer Rebate
The provincial rebate provides up to $4,000 back to qualifying first-time buyers. To be eligible, you must:
- Be a Canadian citizen or permanent resident
- Be at least 18 years of age
- Occupy the property as your principal residence within 9 months of closing
- Have never owned a home or an interest in a home anywhere in the world
- Spousal ownership history and the timing of ownership affect eligibility; have your lawyer verify the applicable refund rules.
The Ontario refund is up to $4,000 for qualifying purchasers, limited by tax paid and the eligible interest acquired. It is not an unconditional payment to every first-time buyer. Check citizenship or residency, age, occupancy, ownership history, spousal rules and filing deadlines. Source: ontario-refund
Toronto First-Time Home Buyer Rebate
For a Toronto purchase, ask your lawyer to verify any municipal first-time-buyer rebate separately from the Ontario refund. Do not assume that a purchaser qualifies for the full provincial refund or any municipal rebate. Confirm each program’s eligibility, application rules and transaction-specific amount before including a refund in your budget.
Who Pays Land Transfer Tax?
Land transfer tax generally falls to the person acquiring the interest in land, subject to the transaction’s rules, exemptions and refunds. Ask your lawyer to calculate any amount due and confirm how it will be funded at closing. Source: ontario-ltt
Some buyers assume they can negotiate the seller into covering LTT as part of a deal. You can certainly make that request — as a condition of a reduced purchase price or a closing credit — but legally and practically, it's the buyer's obligation. Your lawyer will be writing that cheque on closing day.
Non-Residents and Foreign Buyers
Foreign-buyer tax and purchase restrictions depend on legal status, property and exemptions, not simply where someone lives. Toronto also publishes a 10% municipal non-resident speculation tax effective January 1, 2025 for covered transactions, additional to municipal land transfer tax. Ask your lawyer to assess all applicable federal, provincial and municipal rules before committing. [3] Toronto foreign-buyer tax
If you're purchasing on behalf of a non-resident, or there's any ambiguity about residency status, discuss this with your lawyer well before making an offer. The consequences of misclassifying residency at closing are severe.
New Construction: HST Complications
For a new or substantially renovated home, distinguish the contract’s stated price, HST payable and any rebate credited by the builder. CRA’s stated-price guidance describes specific contractual net-rebate arrangements, not automatic inclusion below a price threshold. Ontario excludes HST paid on the purchase price from land-transfer-tax consideration. Ask your lawyer to confirm the agreement, eligibility, adjustments and taxable consideration before committing. Source: hst-stated-price Source: ontario-ltt
For a new-build transaction, ask your lawyer to determine the value of consideration and applicable HST treatment rather than assuming the advertised price is the taxable basis. [2] Ontario calculation rules
How to Budget for Land Transfer Tax
Use the official marginal-rate tables for the actual taxable consideration, property classification and closing date. Percentage rules of thumb can miss higher brackets, refunds or additional taxes.
- Get the number from your broker or lawyer before you offer. I calculate LTT for every client before we write an offer. You should never be surprised by this number at closing.
- Keep LTT funds liquid. This cannot be part of your mortgage. Keep it in a savings account separate from your down payment until closing day.
- North York and Etobicoke are both within Toronto; moving between them does not avoid Toronto municipal land transfer tax. Confirm the actual municipal boundary of the property.
- First-time buyers: apply for your rebate on closing day. Your lawyer handles this, but confirm it's on their checklist. It's not automatic — it must be claimed.
The Bottom Line
Land transfer tax can be a significant closing cost. Budget for the transaction-specific amount after your lawyer checks classification, consideration, exemptions and refund eligibility.
Plan for it early. Know your number before you start serious shopping. And if you're a first-time buyer, make sure you're claiming every rebate you're entitled to. The GTA real estate market rewards preparation — buyers who understand the full cost picture make better decisions, negotiate better, and close with confidence.
If you want me to calculate the exact LTT for a purchase you're considering — or run through the full closing cost picture for a property — reach out. It takes me five minutes and can save you from a very unpleasant surprise.
Know Your Full Buying Costs Before You Offer
Sonia provides a complete closing cost breakdown — including land transfer tax, legal fees, and title insurance — for every buyer she works with. No surprises. Just clarity.
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Sonia Sabouhi, Broker
Forest Hill Real Estate Inc., Brokerage · 12 Years in GTA Real Estate · Luxury & Residential Specialist across the Greater Toronto Area. Trusted by GTA families across every neighbourhood.