Moving · 5 min read
Ontario land transfer tax planning guide
How Ontario land transfer tax is calculated on a home purchase, how Toronto's municipal tax stacks on top, and where first-time buyer rebates apply.
Land transfer tax is paid by the buyer on closing, in cash, on top of the down payment. It is one of the largest single closing costs in Ontario and it is easy to underestimate because it is calculated in brackets rather than a flat rate.
How the brackets work
Each portion of the purchase price is taxed at its own rate, similar to income tax brackets. The first portion is taxed at the lowest rate, the next portion at a higher rate, and so on. That is why the effective rate on a purchase is always lower than the top bracket rate.
Toronto stacks a second tax
Buying inside the City of Toronto adds a municipal land transfer tax calculated on its own bracket table, in addition to the provincial tax. On a typical Toronto purchase under $3 million, that roughly doubles the land transfer tax you pay on closing. From April 1, 2026, municipal rates on homes above $3 million are higher still.
First-time buyer rebates
Ontario and Toronto both offer first-time buyer rebates, subject to eligibility rules. Ontario refunds up to $4,000, which covers the full provincial tax on a home around $368,000. Toronto refunds up to $4,475 on its municipal tax. Rebates reduce the tax owing but rarely eliminate it on a mid-priced home.
Plan the cash, not just the rate
Land transfer tax cannot be added to your mortgage. Budget it as cash needed on closing day alongside legal fees, title insurance, and adjustments. Confirm current rates and rebate rules with the Ontario Ministry of Finance, your municipality, and your lawyer before closing.
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