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Fees & costs

Land transfer tax

LTT

Definition

A tax paid by the buyer when land changes hands.

In Ontario it's charged on a marginal scale from 0.5% to 2.5% of the price; homes in the City of Toronto also pay a municipal land transfer tax (MLTT) with the same brackets up to $2 million and higher rates on luxury tiers.

Land transfer tax is usually the largest single closing cost, and it's due in cash on completion; it can't be added to the mortgage. Ontario's brackets for a home with one or two single-family residences: 0.5% on the first $55,000; 1.0% from $55,000 to $250,000; 1.5% from $250,000 to $400,000; 2.0% from $400,000 to $2,000,000; and 2.5% above $2,000,000.

Buying in the City of Toronto means paying it twice. The MLTT uses the same brackets up to $2 million, so the total is roughly double. Since April 1, 2026, Toronto charges graduated higher rates on homes above $3 million (starting at 4.40% on the portion from $3 million to $4 million).

First-time buyers can get money back: Ontario's refund is up to $4,000 (which covers the full provincial tax on the first $368,000 of price), and Toronto's MLTT rebate is up to $4,475. Eligibility rules apply, including never having owned a home anywhere and occupying it within nine months.

Our land-transfer-tax calculator computes the amount and rebates for your city and price.

Worked example

Illustrative: an $800,000 home in the City of Toronto.

Ontario LTT: $275 (first $55,000) + $1,950 ($55,000–$250,000) + $2,250 ($250,000–$400,000) + $8,000 (2% of $400,000) = $12,475. Toronto MLTT on the same brackets: $12,475. Total: $24,950.

First-time buyer: minus the $4,000 Ontario refund and the $4,475 Toronto rebate = $16,475. Outside Toronto, the same first-time buyer would pay $12,475 − $4,000 = $8,475.

Illustrative figures only, rounded; not a quote or current rate. See today’s rates on our live board.

Sources

  1. Calculating land transfer tax (Government of Ontario)
  2. Land transfer tax refunds for first-time homebuyers (Government of Ontario)
  3. Municipal Land Transfer Tax rates & fees (City of Toronto)
  4. Municipal Land Transfer Tax rebate opportunities (City of Toronto)
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Closing costs

The one-time costs you pay on or before the closing date, on top of your down payment: land transfer tax, legal fees and disbursements, title insurance, adjustments (such as property tax the seller prepaid), the home inspection and, on some files, an appraisal. A common planning range is 1.5% to 4% of the purchase price.

IRD

Interest Rate Differential

Interest Rate Differential: a prepayment penalty on closed fixed-rate mortgages that approximates the interest the lender loses when you break early. It's roughly your balance × (your rate − a comparison rate for the time left in your term) × the years remaining. On a fixed mortgage you usually pay the greater of the IRD or three months' interest.

Mortgage default insurance

Insurance the lender takes out (you pay the premium) when your down payment is under 20%. Provided by CMHC, Sagen, or Canada Guaranty. Protects the lender if you default — you do not get insurance proceeds.

Prepayment penalty

The charge for paying off or breaking a closed mortgage before the end of its term (or prepaying more than your privileges allow). Closed variable: usually three months' interest. Closed fixed: usually the greater of three months' interest or the interest rate differential (IRD). Your contract sets the exact formula.

Title insurance

A one-time insurance policy, usually bought through your lawyer at closing, that protects the owner and/or lender against covered losses from problems with the property's title: for example title fraud, undisclosed liens or work orders, survey issues or encroachments. In Ontario the premium is typically a few hundred dollars on a residential purchase.