Money & tax

Toronto Land Transfer Tax Explained: Why Buyers Pay Twice, and How the Rebate Works

Toronto is the only municipality in Ontario that charges its own land transfer tax, which means a buyer inside the city pays two taxes on the same purchase. This guide shows exactly how both are calculated, what the 2024 luxury tiers changed, how to claim the first-time buyer rebates, and what the tax costs at every price point.

Updated October 22, 2026 · TORE.ca editorial

1. 1.What land transfer tax is

   Land transfer tax (LTT) is a one-time tax the buyer pays when a property changes hands, calculated on the purchase price (or fair market value, if higher) and paid through your lawyer when the deed is registered. Ontario has charged it province-wide since 1974 under the Land Transfer Tax Act. The City of Toronto added its own Municipal Land Transfer Tax (MLTT) on February 1, 2008 under the City of Toronto Act, and it remains the only Ontario municipality with that power.

   Sellers pay no land transfer tax in Ontario. The tax cannot be rolled into a mortgage — it is a cash closing cost. Buyers outside Toronto (Mississauga, Brampton, Vaughan, Markham, Richmond Hill, Oakville, Pickering, Ajax, Whitby and every other GTA municipality) pay the provincial tax only.

2. 2.The Ontario brackets, and how they stack

   The provincial tax is graduated — each slice of the price is taxed at its own rate, like income tax. For a property containing one or two single-family residences:

   • 0.5% on the first $55,000
   • 1.0% on the portion from $55,000 to $250,000
   • 1.5% on the portion from $250,000 to $400,000
   • 2.0% on the portion from $400,000 to $2,000,000
   • 2.5% on the portion above $2,000,000

   Worked through for a $1,000,000 home: $275 + $1,950 + $2,250 + $12,000 = $16,475. The common mistake is to multiply the whole price by the top rate — 2% of $1,000,000 would be $20,000, and that is not what you pay. The effective rate on a $1,000,000 home is about 1.65%.

   For other property types — commercial, vacant land, and residential with three or more units — the 2.5% tier does not apply; the rate caps at 2% above $400,000.

3. 3.Toronto’s municipal tax and the 2024 luxury tiers

   The MLTT uses the same brackets as the province up to $3,000,000, which is why most buyers describe it as "the tax doubles inside Toronto." A $1,000,000 home pays $16,475 provincially and another $16,475 to the city — $32,950 in total.

   On January 1, 2024, City Council added graduated tiers on the portion of the price above $3 million (By-law 1423-2023), aimed at the luxury market:

   • 3.5% on the portion from $3,000,000 to $4,000,000
   • 4.5% on the portion from $4,000,000 to $5,000,000
   • 5.5% on the portion from $5,000,000 to $10,000,000
   • 6.5% on the portion from $10,000,000 to $20,000,000
   • 7.5% on the portion above $20,000,000

   The effect is significant at the top of the market. A $5,000,000 Forest Hill or Rosedale house now pays $141,475 in municipal tax, against $111,475 under the old flat 2.5% — and $252,950 in total land transfer tax. A $10,000,000 Bridle Path estate pays $416,475 to the city and $652,950 combined, about 6.5% of the price.

4. 4.Full price table: what you pay, inside and outside Toronto

   Figures are before any first-time buyer rebate. "Outside Toronto" means every other Ontario municipality.

   • $400,000 — Outside Toronto $4,475 · Inside Toronto $8,950
   • $500,000 — $6,475 · $12,950
   • $750,000 — $11,475 · $22,950
   • $1,000,000 — $16,475 · $32,950
   • $1,500,000 — $26,475 · $52,950
   • $2,000,000 — $36,475 · $72,950
   • $2,500,000 — $48,975 · $97,950
   • $3,000,000 — $61,475 · $122,950
   • $3,500,000 — $73,975 · $152,950
   • $4,000,000 — $86,475 · $182,950
   • $5,000,000 — $111,475 · $252,950
   • $10,000,000 — $236,475 · $652,950

   Every figure above is produced by the same formula as the TORE.ca Land Transfer Tax Calculator; use it for any price.

5. 5.The first-time buyer rebates: $4,000 + $4,475

   Ontario refunds up to $4,000 of the provincial tax to first-time buyers; Toronto refunds up to $4,475 of the municipal tax. Together that is $8,475, and it is claimed by your lawyer on the closing statement — no separate application if the paperwork is done on time (otherwise you can apply within 18 months of registration).

   The $4,000 provincial refund equals the full provincial tax on a $368,000 purchase, so first-time buyers pay no Ontario LTT up to that price. The $4,475 Toronto refund equals the full municipal tax on a $400,000 purchase. Above those prices, the refund is a flat $4,000 / $4,475 off — it does not phase out at higher prices, which matters in Toronto where very few first homes cost under $400,000.

   Who qualifies

   • You are at least 18 years old.
   • You have never owned an eligible home, or an interest in one, anywhere in the world, at any time.
   • Your spouse has not owned an eligible home anywhere in the world while being your spouse. (If your spouse owned a home before you were married or became common-law, you can still qualify — but only for your share.)
   • You occupy the home as your principal residence within nine months of closing.
   • For the provincial refund, since January 1, 2017 you must also be a Canadian citizen or permanent resident at closing, or become one within 18 months.

   If two buyers purchase together and only one qualifies, the refund is prorated to the qualifying buyer’s share — 50% of $4,000 and $4,475 on a 50/50 purchase.

6. 6.Exemptions and special cases

   • Transfers between spouses: exempt when made under a separation agreement or court order, or where the only consideration is assuming a mortgage. A straightforward gift of a half-interest to a spouse with no mortgage assumption is also exempt. Adding a spouse to title on a mortgaged home is often taxable on the mortgage share — get legal advice.
   • Transfers to a family business corporation or family farm: specific exemptions exist; rare for residential buyers.
   • Gifts and inheritances: no tax when no consideration passes and no mortgage is assumed. A transfer in exchange for assuming a mortgage is taxed on the mortgage amount.
   • New construction: tax is calculated on the full price including HST, so budget on the gross figure, not the net-of-rebate price in the builder’s brochure.
   • Assignments: when you buy a pre-construction unit by assignment, land transfer tax applies at final closing on the total price you paid (original price plus assignment premium) — not the original buyer’s price.

7. 7.Non-resident speculation tax (NRST)

   Separate from land transfer tax but collected with it: foreign nationals, foreign corporations and taxable trustees pay a 25% Non-Resident Speculation Tax on the full price of residential property anywhere in Ontario (province-wide and 25% since October 25, 2022). It is in addition to both land transfer taxes. Rebates exist for buyers who become permanent residents within four years, and exemptions for some nominees, protected persons and spouses of Canadians. The federal foreign-buyer ban (Prohibition on the Purchase of Residential Property by Non-Canadians Act), extended to January 1, 2027, separately prohibits most non-Canadians from buying in Toronto and other census metropolitan areas at all.

8. 8.How and when it is paid

   Your lawyer calculates the tax on the statement of adjustments, collects it from you with the balance due on closing (bank draft or wire, usually one to two days before), and remits it electronically to the province and the city when the transfer is registered through Teraview. You will see it as a single line on the closing statement — "Land Transfer Tax" and, in Toronto, "Municipal Land Transfer Tax" — with the refunds shown as credits if you qualify.

   Because it is due on closing day in cash, it belongs in your down-payment savings plan, not your post-closing budget. Lenders ignore it entirely when qualifying you, which is how buyers get caught: a pre-approval for a $1,000,000 purchase with 20% down tells you nothing about the $32,950 you also need in Toronto.

9. 9.Does the Toronto tax change where to buy?

   At $1,000,000 the municipal tax is $16,475; at $1,500,000 it is $26,475. For many buyers that is the equivalent of six months to a year of mortgage principal, or the difference between a semi-detached inside the city and a detached across Steeles Avenue in Vaughan or in Pickering. It should not decide where you live, but it should be in the comparison — along with property tax rates, which are lower in Toronto (about 0.72% of assessed value in 2025) than in most 905 municipalities (Brampton and Oshawa over 1%), and which over a decade of ownership can offset the one-time tax.

   Two timing points: the rebate is per buyer, not per property, so if you are buying with a partner who already owned, your share still qualifies. And if you are close to the $368,000 / $400,000 thresholds — rare in Toronto, common in parts of the 905 — the rebate makes the provincial tax zero and the price effectively lower.

Rules cited: Ontario Land Transfer Tax Act, R.S.O. 1990, c. L.6 and Ontario Ministry of Finance refund rules for first-time purchasers; City of Toronto Act, 2006 and Toronto Municipal Code Chapter 760 as amended by By-law 1423-2023 (effective January 1, 2024); Non-Resident Speculation Tax (Ontario, 25% province-wide from October 25, 2022); Prohibition on the Purchase of Residential Property by Non-Canadians Act (extended to January 1, 2027); City of Toronto 2025 property tax rates. All dollar figures computed with the published brackets.