Land transfer tax in Ontario and Toronto: the complete 2025 guide
Land transfer tax is the largest closing cost in a Toronto purchase and the one buyers most often forget to budget. It is paid in cash on closing day — it cannot be added to the mortgage — and inside the City of Toronto it is charged twice. This guide walks through both taxes, the first-time-buyer rebates, and the luxury tiers that took effect in 2024.
Ontario land transfer tax brackets
The provincial tax is graduated, so each slice of the price is taxed at its own rate: 0.5% on the first $55,000; 1.0% from $55,000 to $250,000; 1.5% from $250,000 to $400,000; 2.0% from $400,000 to $2,000,000; and 2.5% on anything above $2,000,000 when the property contains one or two single-family residences. The brackets stack — a $1,000,000 home pays $275 + $1,950 + $2,250 + $12,000 = $16,475.
Toronto’s municipal land transfer tax (MLTT)
Every home inside the City of Toronto — Etobicoke to Scarborough, Steeles to the lake — also pays the MLTT, collected by the city since 2008. Up to $3,000,000 the municipal brackets mirror the provincial ones, so the bill effectively doubles: that $1,000,000 home pays $16,475 to Ontario and another $16,475 to Toronto, $32,950 in total. On January 1, 2024 the city added graduated luxury tiers on the portion of the price above $3 million: 3.5% from $3M to $4M, 4.5% to $5M, 5.5% to $10M, 6.5% to $20M and 7.5% above $20M. A $5,000,000 Rosedale house now pays about $141,475 in municipal tax alone, against $111,475 provincially.
What the 905 saves
Mississauga, Brampton, Vaughan, Markham, Richmond Hill, Oakville, Pickering, Ajax, Whitby and every other GTA municipality charge only the provincial tax. At the $1,000,000 mark, the identical house just across Steeles Avenue in Vaughan closes $16,475 cheaper than one in North York. For buyers comparing a Toronto semi against a 905 detached at the same price, the MLTT is often the deciding $15,000–$25,000.
First-time buyer rebates
Ontario refunds up to $4,000 of the provincial tax, which wipes it out entirely on purchases up to $368,000. Toronto refunds up to $4,475 of the municipal tax, covering purchases up to about $400,000 in full. Both require that you have never owned an interest in a home anywhere in the world, that your spouse has not owned one while being your spouse, that you are at least 18, and that you occupy the home as your principal residence within nine months. Your lawyer claims both on the closing statement — no separate application is needed if the paperwork is done on time.
Who pays, and when
The buyer pays, through their real-estate lawyer, on the day the deed is registered. Lenders do not finance it, so it must sit in your bank account alongside the balance of the down payment, legal fees (typically $1,500–$2,500 in Toronto), title insurance (about $300–$500) and adjustments for prepaid property tax or condo fees. Sellers pay no land transfer tax in Ontario.
Special cases
- Non-resident speculation tax: 25% of the price on residential property purchased anywhere in Ontario by foreign nationals, foreign corporations or taxable trustees, on top of both land transfer taxes.
- New construction: land transfer tax applies to the full price including HST, so budget on the gross figure.
- Transfers between spouses, and to a family business corporation in some cases, can be exempt — ask a lawyer before assuming.
- Commercial and multi-residential (3+ units) properties use the same provincial brackets but with the 2.0% rate capped at $400,000-plus and no 2.5% tier.
Sources: Ontario Ministry of Finance, Land Transfer Tax Act and refund rules; City of Toronto, Municipal Land Transfer Tax By-law 1423-2023 (graduated rates effective January 1, 2024). Verify final amounts with your real estate lawyer before closing.