Understanding Land Transfer Tax in Ontario

Ask a first-time buyer what they've saved for and they'll say the down payment. Ask them about land transfer tax and you often get a blank look, right up until their lawyer's trust ledger arrives. It's typically the largest single closing cost in Ontario.

How the provincial tax is calculated

Ontario's land transfer tax uses marginal brackets, like income tax: 0.5% on the first $55,000, 1% up to $250,000, 1.5% up to $400,000, 2% up to $2 million, and 2.5% above that. On a $750,000 home, that works out to roughly $11,475.

Buying in Toronto? Double it

The City of Toronto charges its own municipal land transfer tax that mirrors the provincial brackets, effectively doubling the bill for properties inside the city limits. That same $750,000 purchase costs about $22,950 in combined land transfer taxes in Toronto. Higher-value properties face additional luxury tiers above $3 million.

First-time buyer rebates

• Ontario rebates up to $4,000, fully covering the provincial tax on homes up to $368,000.
• Toronto adds a rebate up to $4,475 on the municipal side.
• To qualify you must be 18+, never have owned a home anywhere in the world, and occupy the property within nine months. If your spouse has owned a home while your spouse, eligibility gets complicated, ask before you assume.

Planning around it

Land transfer tax can't go into the mortgage, it's cash on closing, on top of your down payment. Budget for it from day one, and remember it when comparing a Toronto property against one in Mississauga, Vaughan or Halton: the tax difference on the same price point can be five figures.

Run your exact numbers with our closing costs calculator, and if the total changes your budget, let's rework the plan before you're in an offer, not after.

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