Land Transfer Tax in Ontario Explained (2026)
How Ontario land transfer tax works in 2026 — the marginal brackets, the extra Toronto municipal tax, and the first-time buyer rebates that can save you thousands.
How Ontario land transfer tax works in 2026 — the marginal brackets, the extra Toronto municipal tax, and the first-time buyer rebates that can save you thousands.
Land transfer tax (LTT) is the closing cost that surprises Ontario buyers most — a four- or five-figure bill due the day you take ownership, payable in cash and never financeable into the mortgage. It's calculated in marginal brackets, Toronto buyers pay it twice, and first-time buyers can claw a meaningful chunk back through rebates. This guide walks through exactly how the tax is built up, what it costs at real price points, and who pays less.
The short answer
Ontario charges land transfer tax on every property purchase, calculated on a sliding marginal scale from 0.5% to 2.5% of the price. Buyers in the City of Toronto pay a second municipal LTT of roughly the same amount — effectively doubling the bill. First-time buyers can receive a rebate of up to $4,000 provincially and, in Toronto, up to $4,475 municipally. The tax is due in full on closing day and cannot be added to your mortgage. Calculate your exact LTT here.
How the Ontario provincial LTT is calculated
Provincial LTT works like income tax: it is marginal, so each slice of the purchase price is taxed at its own bracket rate rather than the whole price being taxed at the top rate. The 2026 brackets are:
| Portion of purchase price | Rate |
|---|---|
| First $55,000 | 0.5% |
| $55,000.01 to $250,000 | 1.0% |
| $250,000.01 to $400,000 | 1.5% |
| $400,000.01 to $2,000,000 | 2.0% |
| Over $2,000,000 (1–2 single-family residences) | 2.5% |
The 2.5% top bracket applies to the value over $2 million on land containing one or two single-family residences. Different rules can apply to larger multi-residential and commercial properties, but the brackets above cover almost every residential purchase.
Worked example: building up the tax on a $700,000 home
To see how the marginal math works, here's the provincial LTT on a $700,000 purchase, bracket by bracket (illustrative figures):
| Bracket | Amount taxed | Rate | Tax |
|---|---|---|---|
| First $55,000 | $55,000 | 0.5% | $275 |
| $55,000–$250,000 | $195,000 | 1.0% | $1,950 |
| $250,000–$400,000 | $150,000 | 1.5% | $2,250 |
| $400,000–$700,000 | $300,000 | 2.0% | $6,000 |
| Total provincial LTT | $10,475 |
So a $700,000 home carries roughly $10,475 in provincial LTT before any first-time buyer rebate. A buyer in Toronto would pay close to that amount again in municipal LTT — around $20,900 combined.
The Toronto municipal land transfer tax
If your home is anywhere inside the City of Toronto boundaries, you pay a second land transfer tax to the city on top of the provincial one. It is calculated on a near-identical bracketed scale, which is why people say Toronto buyers "pay LTT twice." For higher-value homes Toronto also layers on additional luxury brackets above $3 million, so very expensive properties carry an even heavier municipal charge. Both the provincial and municipal taxes are collected by your lawyer and remitted on closing.
This single fact is the biggest reason closing costs run higher in Toronto than in the 905 or the rest of the province — see how it compares region by region in closing costs in Canada by province.
What LTT costs at different price points
The table below shows approximate total land transfer tax for a non-first-time buyer, comparing a purchase outside Toronto (provincial only) with a purchase inside Toronto (provincial + municipal). Figures are illustrative and rounded.
| Purchase price | Provincial LTT | + Toronto municipal LTT | Toronto total |
|---|---|---|---|
| $500,000 | ~$6,475 | ~$6,475 | ~$12,950 |
| $700,000 | ~$10,475 | ~$10,475 | ~$20,950 |
| $900,000 | ~$14,475 | ~$14,475 | ~$28,950 |
| $1,200,000 | ~$20,475 | ~$20,475 | ~$40,950 |
Notice how quickly the bill scales: because most of a typical purchase price sits in the 2.0% bracket, every extra $100,000 of price adds about $2,000 of provincial LTT — and the same again in Toronto.
The first-time buyer rebate (provincial + Toronto)
Eligible first-time buyers can claim a rebate of up to $4,000 against the provincial LTT. That fully eliminates the provincial tax on homes priced up to about $368,000, and reduces it dollar-for-dollar above that. In the City of Toronto there is an additional municipal rebate of up to $4,475, which wipes out the municipal tax on homes up to roughly $400,000.
To qualify you generally must:
- Be at least 18 years old;
- Be a Canadian citizen or permanent resident (the provincial rebate has a citizenship/PR requirement);
- Have never owned a home— or an interest in one — anywhere in the world, at any time;
- Have a spouse who has also never owned a home while being your spouse;
- Occupy the home as your principal residence within nine months of closing.
If only one of two buyers qualifies, the rebate is typically prorated to that person's share. A first-time buyer in Toronto can therefore save up to roughly $8,475 in combined rebates. See the wider menu of programs in first-time home buyer mortgages.
Worked example: a first-time buyer in Toronto
Imagine a first-time buyer purchasing a $700,000 condo in Toronto (illustrative):
| Item | Amount |
|---|---|
| Provincial LTT | ~$10,475 |
| Less provincial first-time rebate | −$4,000 |
| Toronto municipal LTT | ~$10,475 |
| Less Toronto first-time rebate | −$4,475 |
| Net land transfer tax due | ~$12,475 |
Without the rebates the same buyer would owe roughly $20,950 — so the first-time programs save about $8,475 here.
When is land transfer tax due, and who's exempt?
LTT is payable on closing day, when title transfers to you. Your real estate lawyer calculates it, collects it as part of your cash-to-close, and registers the transfer. Because it must be paid in cash, it cannot be rolled into your mortgage — a common and costly misunderstanding.
A handful of transfers are exempt or qualify for special treatment, including certain transfers between spouses, transfers to family members where no money changes hands, and transfers into a person's own corporation in limited circumstances. These are technical — confirm any exemption with your lawyer before assuming it applies.
Where LTT fits in your budget
Land transfer tax is usually the single largest line in your closing costs, sitting alongside legal fees, title insurance, and adjustments. Because it's due in cash and can't be financed, it directly reduces the down payment or buffer you have on closing day. Build it into your numbers early — especially in Toronto — using the closing costs calculator for the full picture and the LTT calculator for the exact tax with rebates applied. Have a question about your specific deal? Ask Maya or contact our team.
Frequently asked questions
How much is land transfer tax in Ontario?
It ranges from 0.5% to 2.5% of the purchase price on a marginal scale, so each slice of the price is taxed at its bracket rate. On a $700,000 home the provincial LTT is roughly $10,475 before any first-time buyer rebate.
Do I really pay land transfer tax twice in Toronto?
Effectively yes. Buyers inside the City of Toronto pay the provincial LTT plus a municipal LTT of similar size, roughly doubling the total. Both are calculated on bracketed scales and both are due at closing.
How much is the first-time buyer land transfer tax rebate?
Up to $4,000 on the provincial LTT, plus up to $4,475 on Toronto's municipal LTT for eligible first-time buyers — a combined saving of as much as roughly $8,475 in Toronto.
Who qualifies as a first-time buyer for the rebate?
Generally you must be 18 or older, a Canadian citizen or permanent resident, have never owned a home anywhere in the world, have a spouse who hasn't owned one while married to you, and move in within nine months of closing.
When is land transfer tax due?
On closing day. Your lawyer collects it as part of your cash-to-close and registers the transfer of title at the same time.
Can I add land transfer tax to my mortgage?
No — LTT must be paid in cash on closing day and cannot be financed. Budget for it as part of your closing costs from the very start.
Buying in Ontario? Talk to us or use the LTT calculator — we'll confirm your exact tax and rebate so there are no closing-day surprises.
Mortgage content produced by Mortgage Squad Advisors' team of FSRA-licensed mortgage advisors and reviewed under the supervision of the brokerage's Principal Broker (FSRA Brokerage #13737) before publication.
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