Buying in Toronto? One of the biggest surprises at closing is land transfer tax. If you are budgeting only for your down payment and legal fees, this line item can throw you off. The good news is you can plan for it with a clear method, and first-time buyer rebates may reduce what you owe. In this guide, you will learn how Toronto’s land transfer taxes work, how to estimate your amount, what rebates to consider, and what other closing costs to budget for. Let’s dive in.
Toronto buyers pay two land transfer taxes
If you buy a home or condo in the City of Toronto, you usually pay two separate land transfer taxes at closing: the Ontario provincial land transfer tax (LTT) and the City of Toronto municipal land transfer tax (MLTT). Each tax is calculated on the purchase price using the same tiered rate schedule. Your lawyer typically collects and remits both at closing.
The municipal LTT is specific to the City of Toronto. If you buy outside city limits, you pay only the provincial LTT in most cases. Always confirm which municipality applies to your property address before you finalize your budget.
How the tax is calculated
Marginal rates explained
Ontario’s LTT and Toronto’s MLTT both use a marginal, or tiered, structure. You apply each rate only to the portion of the price that falls in that bracket. The taxes are calculated separately, then added together.
- 0.5% on the first $55,000
- 1.0% on the portion over $55,000 up to $250,000
- 1.5% on the portion over $250,000 up to $400,000
- 2.0% on the portion over $400,000
Who pays and when
You, the buyer, pay land transfer tax at closing. Your lawyer handles the paperwork and remits the funds as part of the closing process. If you qualify for a first-time buyer rebate, your lawyer can apply it at closing to reduce the cash you need to bring. If not claimed at closing, you can usually apply for the rebate after you take possession.
Quick examples
Below are sample calculations using the marginal structure above. The provincial LTT and the municipal MLTT are each calculated the same way, then combined. These totals are before any rebates.
Purchase price $700,000
- Ontario LTT: $10,475
- Toronto MLTT: $10,475
- Combined LTT: $20,950
Purchase price $1,000,000
- Ontario LTT: $16,475
- Toronto MLTT: $16,475
- Combined LTT: $32,950
Purchase price $2,200,000
- Ontario LTT: $40,475
- Toronto MLTT: $40,475
- Combined LTT: $80,950
Rates, thresholds, and special rules can change, so confirm your numbers with your lawyer and the official Ontario and City of Toronto pages before you firm up an offer.
First-time buyer rebates
First-time buyers may be eligible for rebates from both Ontario and the City of Toronto. If you qualify for both, the rebates reduce each tax separately and can significantly lower what you owe.
Eligibility usually depends on three factors:
- You have never owned a home anywhere.
- You will occupy the property as your principal residence.
- You meet residency and documentation requirements set by the province and the city.
Rebate maximums and documentation can change over time. You typically sign a statutory declaration at closing so your lawyer can apply the rebates to your bill. If you do not claim at closing, you can apply afterward within the time limits set by each program.
Other cases to know
Some transfers are treated differently from a tax perspective. If any of the following apply, speak with your lawyer early:
- Transfers between spouses or certain family transactions.
- Newly built homes, where HST, builder credits, and timing can differ from resale.
- Purchases by corporations, trusts, or non-residents, where additional taxes or filings may apply.
- Assignment sales or other non-standard transfers.
For very high-priced properties, special conditions for rebates or surtaxes may also apply. Always verify your specific situation with official guidance and legal counsel.
What to budget beyond LTT
Land transfer taxes are only one part of your closing costs. Build a complete budget so you are not surprised on closing day.
- Legal fees and disbursements: often $500 to $2,000 for a straightforward purchase.
- Title insurance: commonly $150 to $500 depending on price and policy.
- Home inspection: typically $300 to $600.
- Appraisal (if required by your lender): $300 to $600.
- Property tax and condo fee adjustments: prorated credits or debits at closing.
- Land registration fees: small province-set amounts.
- Mortgage default insurance: if your down payment is under 20% and lender requires it; the premium is usually added to the mortgage, but it affects your total cost.
- HST considerations: resale homes are generally HST-exempt on the purchase price; HST applies to newly built homes and many services.
- Moving, utility hookups, and immediate repairs or improvements.
Common mistakes to avoid
- Confusing the tax base: LTT is calculated on the purchase price, not the mortgage amount.
- Forgetting the second tax: in Toronto, you pay both provincial LTT and the city’s MLTT.
- Expecting the lender to cover it: you usually need to bring LTT funds to your lawyer at closing.
- Relying on rough estimates: use a trusted calculator for a quick sense, then have your lawyer confirm the official amount and any rebates.
Your next steps with a plan
- Price your target properties and run preliminary LTT estimates early in your search.
- Confirm eligibility for first-time buyer rebates and gather required documents.
- Choose a real estate lawyer early so your closing costs and timing are clear.
- Keep a closing buffer for adjustments and last-mile items.
If you want a practical, numbers-first plan for your Toronto purchase, we are here to help. Our team understands downtown condo corridors and transit-oriented neighborhoods, and we will map your budget from offer to keys so there are no surprises. Reach out to OwnIt.ca for a personalized closing-cost estimate and guidance.
This article is informational only. For exact tax amounts, eligibility, or legal interpretation, consult the Government of Ontario, the City of Toronto, and your lawyer or notary.
FAQs
How much land transfer tax is due on a $700,000 Toronto purchase?
- Using the standard brackets, Ontario LTT is $10,475 and the City of Toronto MLTT is $10,475, for a combined total of $20,950 before any rebates.
Do first-time buyers in Toronto get land transfer tax rebates?
- Yes. Both Ontario and the City of Toronto offer separate first-time buyer rebates that can reduce or eliminate portions of the provincial and municipal taxes if you meet eligibility rules.
Does the Toronto municipal land transfer tax apply across the GTA?
- No. The municipal LTT applies only to properties within the City of Toronto; most other GTA municipalities do not charge a municipal LTT, though provincial LTT still applies.
When is land transfer tax paid in Toronto and who remits it?
- Land transfer tax is due at closing; your lawyer collects the funds and remits them to the province and the City of Toronto as part of registration.
What closing costs besides land transfer tax should Toronto buyers plan for?
- Plan for legal fees, title insurance, inspection, appraisal, tax or condo fee adjustments, registration fees, potential mortgage insurance, HST on new builds, moving, and utilities.
Are there extra taxes or rules for non-resident or corporate buyers in Toronto?
- Different rules and additional taxes can apply to non-resident and corporate purchases; consult official guidance and legal counsel early to confirm obligations and timelines.
