Ontario land transfer tax explained
Last reviewed Oct 2026 · OntarioHomeMath
Land transfer tax is usually the largest closing cost after your down payment, and it has to be paid in cash on closing day. Here is how it works in Ontario, what changes if you buy in Toronto, and how first-time buyers can reduce it.
What land transfer tax is
Ontario charges land transfer tax (LTT) whenever land, or an interest in land, changes hands. For a home purchase, the buyer pays it. It is not paid to your lawyer or the seller; your lawyer collects it from you before closing and pays it to the Province when the transfer is registered electronically. If the home is in the City of Toronto, a second tax, the Municipal Land Transfer Tax (MLTT), is paid at the same time.
The tax is based on the "value of the consideration", which for a normal purchase is the price you pay, including anything the seller takes on your behalf such as an assumed mortgage. For a new home it generally includes the HST that is built into the price, net of any rebate assigned to the builder, so check the statement of adjustments with your lawyer.
Ontario LTT rates
Ontario uses marginal brackets, like income tax: each rate applies only to the part of the price that falls in that band. For a property with one or two single-family residences (a house, a condo unit, a semi or a duplex):
| Portion of the price | Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 to $250,000 | 1.0% |
| $250,000 to $400,000 | 1.5% |
| $400,000 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
The 2.5% band only applies to properties with one or two single-family residences. Other property types top out at 2%. For a home between $400,000 and $2 million, a shortcut gives the same answer: price × 2% − $3,525.
Example: a $700,000 home outside Toronto. 2% × $700,000 = $14,000, minus $3,525 = $10,475 in Ontario LTT. Working through each bracket gives the same result: $275 + $1,950 + $2,250 + $6,000.
Toronto’s Municipal Land Transfer Tax
Buy inside the City of Toronto (including Etobicoke, North York, Scarborough, York and East York) and you pay MLTT on top of the provincial tax. Mississauga, Vaughan, Markham and the rest of the GTA do not have a municipal land transfer tax.
Up to $3 million, Toronto’s brackets match Ontario’s, so for most homes the MLTT is the same amount as the provincial tax and your total roughly doubles. Since April 1, 2026, Toronto has applied higher graduated rates to the portion of a residential price above $3 million:
| Portion of the price (1–2 single-family residences) | Toronto MLTT rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 to $250,000 | 1.0% |
| $250,000 to $400,000 | 1.5% |
| $400,000 to $2,000,000 | 2.0% |
| $2,000,000 to $3,000,000 | 2.5% |
| $3,000,000 to $4,000,000 | 4.4% |
| $4,000,000 to $5,000,000 | 5.45% |
| $5,000,000 to $10,000,000 | 6.5% |
| $10,000,000 to $20,000,000 | 7.55% |
| Over $20,000,000 | 8.6% |
Example: an $850,000 condo in Toronto, buyer is not a first-time buyer. Ontario LTT is 2% × $850,000 − $3,525 = $13,475. Toronto MLTT is also $13,475. Total: $26,950.
First-time buyer refunds
Both governments refund some or all of the tax for first-time buyers:
- Ontario: up to $4,000. Because $4,000 is the tax on a $368,000 home, buyers at or below that price pay no provincial LTT.
- Toronto: up to $4,475, which covers the full MLTT on a home up to $400,000.
Using the $850,000 Toronto condo again, a qualifying first-time buyer pays $13,475 − $4,000 + $13,475 − $4,475 = $18,475, saving $8,475.
To qualify for the Ontario refund you must, in short:
- be at least 18;
- be a Canadian citizen or permanent resident, or become one within 18 months of the transfer (you pay the tax on closing and apply for the refund afterward);
- never have owned a home, or an interest in a home, anywhere in the world;
- if you have a spouse, your spouse must not have owned a home anywhere in the world while they were your spouse; and
- move in as your principal residence within nine months of the transfer.
Toronto’s rebate uses essentially the same tests. Neither refund can be claimed twice.
Co-owners. If you buy with someone who does not qualify, such as a parent who already owns a home, the refund is reduced to match the share of the property the qualifying buyer acquires. A first-time buyer taking 50% would get at most half the refund. There is a narrow exception in Ontario’s guidance where a parent is on title only as a bare trustee (for example because the lender requires it) and has no beneficial interest; that needs documentation and is usually claimed after closing.
How to claim. In most purchases your lawyer claims both refunds when registering the transfer, so you simply pay the lower amount. If that does not happen, you can apply to Ontario within 18 months of the registration date and to the City of Toronto within the City’s deadline. Our first-time buyer rebate checker walks through the tests.
Other situations worth knowing
- Foreign buyers. Foreign nationals, foreign corporations and some trustees pay Ontario’s 25% Non-Resident Speculation Tax on residential property anywhere in the province, plus Toronto’s 10% Municipal NRST in the city. This is in addition to regular LTT. See the NRST calculator.
- Adding a spouse to title. Transfers between spouses can be exempt in some cases, for example where the property is the matrimonial home and no mortgage is assumed. Ask your lawyer before assuming this applies.
- Assignments. When you buy a pre-construction home by assignment, tax is based on the total consideration, which includes the payment to the person assigning the contract.
Budgeting tips
Land transfer tax cannot be added to an insured mortgage, so plan for it in cash on top of your down payment. Ask your lawyer for a trust ledger or statement a few days before closing; it will show the LTT, any refund claimed and the exact amount to wire. Run your price through the land transfer tax calculator, then add it into the closing costs calculator for the full picture.
Official sources
- Ontario — Calculating land transfer tax
- Ontario — Land transfer tax refunds for first-time homebuyers
- City of Toronto — MLTT rates and fees
- City of Toronto — MLTT rebate opportunities
- Ontario — Non-Resident Speculation Tax
Last reviewed Oct 2026. General information only, not legal, tax or financial advice. Rules change; confirm with the official sources above and your lawyer or lender.