Ontario Land Transfer Tax Guide

Land transfer tax (LTT) is one of the largest closing costs in Ontario, and it surprises buyers because it is not part of your mortgage and cannot be financed into it. You pay it in cash at closing. This guide explains exactly how it is calculated, why buyers in the City of Toronto effectively pay it twice, and how the first-time buyer rebates can wipe out most or all of the bill. To get your own figure in seconds, use our Ontario land transfer tax calculator.

It is written for Ontario buyers. The brackets and rebate amounts below come from the Ontario Ministry of Finance and the City of Toronto, checked in September 2026. Mortgage Squad Advisors is licensed in Ontario under FSRA #13737.

To see your exact number for any price, use the land transfer tax calculator. When you are ready to get approved, you can start an application at any time.

Ontario land transfer tax is marginal, which means each portion of the purchase price is taxed at its own rate, the same way income tax brackets work. You do not pay one flat percentage on the whole price. The provincial brackets are¹:

• 0.5% on the amount up to $55,000
• 1.0% on the amount from $55,001 to $250,000
• 1.5% on the amount from $250,001 to $400,000
• 2.0% on the amount above $400,000 (up to $2,000,000 for homes)
• 2.5% on the amount above $2,000,000, for homes

The top 2.5% tier applies where the land contains one or two single-family residences. Because the tax is marginal, the effective rate you pay is always lower than the bracket your purchase price falls into. The tax applies across all of Ontario, and a separate municipal layer is added inside the City of Toronto.

You can run any price through the calculator rather than doing the bracket math by hand.

If the property is inside the City of Toronto, you pay a second, separate municipal land transfer tax (MLTT) on top of the provincial one. Up to $3,000,000 the municipal tax uses the same brackets as the provincial tax, so Toronto buyers in that range pay double the land transfer tax of a buyer purchasing the same-priced home anywhere else in the province. Above $3,000,000, homes with one or two single-family residences face higher graduated Toronto rates, starting at 4.40% and rising to 8.60% above $20 million, in effect since April 1, 2026².

This is the single biggest reason a Toronto closing costs more than an identical purchase in Mississauga, Vaughan, or Hamilton. The two taxes are calculated independently, remitted together at closing, and both are the buyer's responsibility. Foreign buyers also face Ontario’s 25% Non-Resident Speculation Tax³ and, in Toronto, a 10% municipal non-resident speculation tax.

The good news is that Toronto offers its own first-time buyer rebate in addition to the provincial one, which is covered below. Budget for both taxes from the start so the total does not catch you off guard.

Ontario offers a refund of provincial land transfer tax to qualifying first-time home buyers of up to $4,000⁴. If your provincial LTT is $4,000 or less, the rebate can reduce it to zero. If it is more, you pay only the amount above $4,000.

To qualify, you must be at least 18, be a Canadian citizen or permanent resident (or become one within 18 months), occupy the home as your principal residence within nine months, and never have owned a home or an interest in a home anywhere in the world. Your spouse also cannot have owned one while you were spouses. The $4,000 refund means no provincial tax on the first $368,000 of the price, and it partially offsets the tax above that.

Your real estate lawyer normally claims the refund when the transfer is registered, so it is applied automatically against what you owe. The calculator lets you toggle the first-time buyer rebate on to see the net cost.

Buyers in the City of Toronto can claim a second rebate against the municipal LTT of up to $4,475⁵. This stacks with the provincial rebate, so an eligible first-time buyer in Toronto can claim up to $4,000 provincially and up to $4,475 municipally.

The eligibility rules for the Toronto rebate closely track the provincial ones: at least 18, never owned a home anywhere in the world, occupy the home within nine months, and Canadian citizenship or permanent residency (or obtaining it within 18 months). Both rebates are claimed at closing by your lawyer, so you see the net figure rather than paying in full and waiting for a refund.

For a first-time buyer in Toronto, these two rebates combined can erase the entire land transfer tax bill on a modestly priced home, and meaningfully cut it on a more expensive one.

These examples show the marginal math. The first is a non-Toronto purchase; the second and third are Toronto purchases, including one with both first-time rebates applied.

Example 1: $600,000 home outside Toronto (e.g. Mississauga), not a first-time buyer:

• 0.5% x $55,000 = $275
• 1.0% x $195,000 (the $55,001-$250,000 band) = $1,950
• 1.5% x $150,000 (the $250,001-$400,000 band) = $2,250
• 2.0% x $200,000 (the $400,001-$600,000 portion) = $4,000
• Provincial LTT total = $8,475. No municipal tax applies outside Toronto.

Example 2: $600,000 home in Toronto, first-time buyer:

• Provincial LTT = $8,475 (same brackets as above)
• Municipal LTT uses the same brackets at this price, so $8,475
• Less provincial first-time refund of $4,000
• Less Toronto first-time rebate of $4,475
• Net = $8,475 + $8,475 - $4,000 - $4,475 = $8,475. The two rebates together remove roughly one full layer of tax.

Example 3: $1,000,000 home in Toronto, not a first-time buyer:

• Provincial: $275 + $1,950 + $2,250 + 2.0% x $600,000 ($12,000) = $16,475
• Municipal LTT uses the same brackets at this price, so $16,475
• Combined LTT = $32,950, with no rebates available.

These figures illustrate the method; confirm your exact amount with the calculator or your lawyer, especially for Toronto homes above $3,000,000, where the higher municipal rates apply.

Land transfer tax is paid by the buyer at closing. It is not spread over your mortgage and it cannot be added to the loan: it must come from your own funds on closing day, alongside legal fees and other adjustments.

In practice, your real estate lawyer collects the tax from you and remits it to the province (and to the City of Toronto, if applicable) when the transfer is registered⁶. Any first-time buyer rebates are applied at the same time, so you provide the net amount rather than paying in full and claiming back later.

Because it is a large, non-financeable cash cost, treat LTT as a core part of your closing budget from day one. Knowing the number early prevents a last-minute shortfall.

Land transfer tax is predictable once you know the price and the municipality, so there is no reason to be surprised by it. Run your target price through the land transfer tax calculator, toggle the first-time buyer rebates if they apply to you, and fold the result into your closing budget.

When you are ready to find out what you qualify for, start an application with Mortgage Squad Advisors (FSRA #13737) and we will help you plan for the full cost of getting to closing.