Understanding Ontario Land Transfer Tax

What is the Ontario Land Transfer Tax?

When you’re preparing to buy a home in Ontario, one of the most common costs that catches buyers off guard is the Land Transfer Tax (LTT). As a mortgage broker, I always encourage clients to plan for this expense early, so there are no surprises at closing.

What Is Land Transfer Tax?

The Land Transfer Tax is a provincial tax payable each time real estate changes hands. It’s the buyer’s responsibility, not the seller’s, and it’s paid on closing when the property is officially transferred into your name.

Your lawyer will calculate the exact amount owing and submit the payment to the Ontario government on your behalf. First-Time Homebuyer Rebate. 

How Is It Calculated?

The Land Transfer Tax is based on the purchase price of the property and follows a sliding scale:

• 0.5% on the first $55,000
• 1.0% on the portion between $55,000 and $250,000
• 1.5% on the portion between $250,000 and $400,000
• 2.0% on the portion between $400,000 and $2 million
• 2.5% on any amount over $2 million

If you’re purchasing within Toronto, keep in mind there’s an additional municipal Land Transfer Tax, which essentially doubles the total amount.

First-Time Home Buyer Rebate

There’s good news for first-time buyers. Ontario offers a Land Transfer Tax Rebate of up to $4,000, which can significantly reduce—or even eliminate—your tax if you’re purchasing a lower-priced property.

This incentive is one I always highlight for my clients, as it can make a real difference when budgeting for closing costs.

Why Budgeting Matters

Unlike your mortgage, the Land Transfer Tax cannot be financed. It must be paid in full, upfront, on closing day.

That’s why it’s so important to factor this cost into your home-buying budget from the very beginning. Planning ahead helps ensure a smooth, stress-free closing.

Estimate Your Land Transfer Tax

To make things easier, you can use my Land Transfer Tax Calculator to get an instant estimate:
👉 Click here to calculate your Land Transfer Tax

If you’re a first-time buyer, buying a new build, or a foreign buyer, you can select those options to get a customized quote for your specific property.

Even better, schedule a call with me to review your numbers in detail, or I can connect you with one of our trusted local law firms to assist with your closing.