Toronto Land Transfer Tax Guide for Confident Homebuyers

Buying in Toronto comes with an extra line on your closing statement that surprises many first-time buyers. You do not just pay Ontario’s land transfer tax. You also pay the City of Toronto’s own municipal land transfer tax. If you are planning a purchase, understanding how both taxes work, what rebates you might qualify for, and how to budget will help you make a confident offer.

In this guide, you will learn what the land transfer taxes are, how to estimate your costs, the first-time buyer rebates available in Toronto, and a simple checklist to prepare your financing. Let’s dive in.

What is land transfer tax in Toronto?

Land transfer tax (LTT) is a one-time tax you pay when you buy real estate in Ontario. In Toronto, you pay two separate charges at closing:

• The provincial Ontario Land Transfer Tax (LTT).
• The City of Toronto Municipal Land Transfer Tax (MLTT).

Both taxes use the same tiered, or marginal, rate schedule. Because Toronto adds the MLTT on top of the provincial LTT, buyers in the city should plan for a larger cash outlay at closing compared with nearby municipalities.

Who pays and when

You, the buyer, are responsible for both taxes. Your real estate lawyer collects the funds in trust and pays the taxes at closing. These taxes are separate from your down payment and mortgage costs.

Other taxes and levies are not part of LTT or MLTT. Examples include municipal property taxes, development charges, and, in some cases, the Non-Resident Speculation Tax (NRST) for certain non-resident purchasers. HST rules can apply to new homes bought from builders, but HST generally does not apply to resale residential transfers.

Toronto and Ontario rate bands

As of mid-2024, both Ontario LTT and Toronto MLTT use the same marginal rates. The rates apply to portions of the purchase price in each band:

• 0.5% on the first $55,000
• 1.0% on the portion from $55,000.01 to $250,000
• 1.5% on the portion from $250,000.01 to $400,000
• 2.0% on the portion from $400,000.01 to $2,000,000
• 2.5% on any portion above $2,000,000

Because Toronto mirrors the provincial schedule, you calculate each tax separately using these bands, then add them together.

How to calculate your tax

The most reliable way is to apply the marginal rates band by band, then add the totals for the provincial LTT and the Toronto MLTT.

Here are sample estimates based on the rate schedule above (as of mid-2024):

• $600,000 purchase:

  • Provincial LTT: $8,475
  • Toronto MLTT: $8,475
  • Combined total: $16,950

• $1,000,000 purchase:

  • Provincial LTT: $16,475
  • Toronto MLTT: $16,475
  • Combined total: $32,950

• $2,500,000 purchase:

  • Provincial LTT: $48,975
  • Toronto MLTT: $48,975
  • Combined total: $97,950

Tip: For prices between $250,000 and $400,000, a quick check is provincial LTT = $2,225 + 1.5% × (price − $250,000). Then apply the same to MLTT and add them together.

Always confirm final numbers with your lawyer and the official provincial and City of Toronto calculators before you firm up your offer or finalize your mortgage instructions.

First-time homebuyer rebates in Toronto

First-time buyers can reduce these taxes through two separate programs. If you qualify, you may claim both at the same time.

• Ontario first-time homebuyer refund of LTT: maximum $4,000.
• City of Toronto first-time homebuyer refund of MLTT: maximum $4,475.

General eligibility includes being a true first-time buyer (you and any spouse or partner have not previously owned a qualifying residential property), intending to occupy the home as your principal residence within a set period, meeting age and residency or citizenship requirements, and providing the required documents. Your lawyer usually prepares and files the claim as part of closing.

Example for a $600,000 Toronto purchase (as of mid-2024):

• Combined LTT + MLTT before rebates: $16,950.
• Subtract Ontario rebate $4,000 and Toronto rebate $4,475.
• Net land transfer taxes after rebates: $8,475.

Note that the Ontario refund can fully cover the provincial LTT only when the calculated tax is at or below $4,000, which is roughly up to a purchase price near $368,333. Above that price, you receive a partial refund up to the $4,000 cap. The City rebate works the same way for MLTT up to its $4,475 cap.

Not all buyers are eligible. For example, investors who do not plan to occupy the property do not qualify for first-time buyer rebates, and some non-resident purchasers may face separate NRST rules. If there is any doubt about your history or eligibility, speak with your lawyer early.

Budget your cash to close in Toronto

Land transfer taxes are often the largest cost after the down payment. Build a complete budget so there are no surprises on closing day.

Common items to include:

• Down payment per your mortgage approval.
• Provincial LTT and Toronto MLTT, after any rebates you expect.
• Legal fees and disbursements.
• Title insurance (one-time premium, price varies by home value).
• Adjustments on closing, such as prepaid property taxes or condo fees.
• Home inspection fee if applicable.
• Mortgage-related costs, such as appraisal or application fees.
• Mortgage default insurance (CMHC) for high-ratio mortgages, usually added to your loan. If you choose to pay it upfront, include it here.
• HST considerations on new-build purchases. Builders may structure pricing differently, and separate HST rebates can apply.

A practical rule of thumb in Toronto is to set aside about 1 to 3 percent of the purchase price for closing costs, excluding your down payment. Since Toronto has both LTT and MLTT, many buyers will see the taxes alone exceed the lower end of that range, especially in mid-range and higher price bands. Use the official calculators for your exact number.

Illustrative example for a $1,000,000 Toronto home (rounded):

• Combined LTT/MLTT: about $32,950.
• Legal fees, title insurance, and disbursements: about $2,000 to $3,500.
• Adjustments and other items: varies by property.

Total cash to close, excluding your down payment, can often reach $40,000+ at this price point. Your lawyer and lender can prepare an estimated statement of adjustments so you know exactly what to bring to closing.

Quick notes on other taxes

• Non-Resident Speculation Tax (NRST): Applies in the Greater Golden Horseshoe to certain non-resident purchasers. The rate is significant and rules can change. Confirm applicability early.
• HST on new homes: HST generally does not apply to resale residential purchases. New homes from builders follow different HST rules and may include separate rebates. Discuss details with your builder and lawyer.

Step-by-step checklist before you offer

1. Run a land transfer tax estimate for your target price using the official Ontario and City of Toronto calculators.

2. Confirm first-time buyer eligibility early if you plan to claim rebates. Gather required documents and advise your lawyer.

3. Ask your lender and lawyer for an estimated statement of adjustments and total funds needed at closing once you have an agreed price.

4. Ensure your lawyer will apply for the provincial and municipal rebates at closing if you are eligible.

5. If you are a non-resident buyer or purchasing with a non-resident co-borrower, review NRST rules and plan for any additional tax.

6. For new builds, confirm HST treatment and any applicable HST rebates with the builder and your lawyer.

Common pitfalls to avoid

• Assuming only one tax applies. In Toronto, buyers pay both the provincial LTT and the city’s MLTT.
• Underestimating cash to close. LTT and MLTT can be substantial at Toronto price points.
• Waiting to confirm rebate eligibility. Sort this out before closing so the correct funds are in place.
• Confusing land transfer taxes with municipal property tax installments or adjustments. They are separate items.

Work with a trusted local advisor

Buying in Toronto is competitive, and the closing costs can feel complex. You deserve clear guidance, accurate numbers, and a plan that fits your budget. As a boutique, broker-led team serving Toronto and the west GTA, we provide personal care from first consultation to closing. We coordinate closely with your lender and lawyer, confirm your eligibility for rebates, and prepare a clean, step-by-step plan so you can move forward with confidence.

If you are exploring a Toronto purchase or want a second opinion on your numbers, connect with Linda Fernandes Real Estate to schedule your consultation.

FAQs

What is the Municipal Land Transfer Tax in Toronto?

• It is a city tax charged on top of Ontario’s land transfer tax for properties located in the City of Toronto, calculated using the same marginal rate bands.

Who pays Toronto’s MLTT and the Ontario LTT?

• The buyer pays both taxes. Your lawyer collects the funds and remits the taxes at closing.

How do first-time buyer rebates work in Toronto?

• Eligible first-time buyers may receive up to $4,000 off the provincial LTT and up to $4,475 off the Toronto MLTT, claimed at closing through your lawyer.

How much land transfer tax would I pay on $1,000,000?

• As of mid-2024, the estimate is about $16,475 in provincial LTT and $16,475 in Toronto MLTT, for a combined total near $32,950.

Can I avoid the MLTT by using a different mailing address?

• No. The tax applies based on where the property is located. If the home is in the City of Toronto, MLTT applies.

I previously owned a home outside Canada. Am I still a first-time buyer?

• Prior ownership abroad can affect eligibility. Because rules consider ownership anywhere, confirm your status with your lawyer before relying on a rebate.

Do investors pay different land transfer tax rates?

• The rate schedule is the same, but investors who will not occupy the property are not eligible for first-time buyer rebates. Some non-resident purchasers may also face NRST.