Ontario + Toronto Land Transfer Tax Explained: How the Brackets Work and What First-Time Buyers Get Back
Buy in Toronto and you pay land transfer tax twice — but first-time buyers can claim up to $8,475 back across both levels.
How is land transfer tax calculated in Ontario and Toronto, and what do first-time buyers get back?
Land transfer tax is a one-time tax paid at closing, calculated on the purchase price using graduated marginal brackets. According to the Ontario Ministry of Finance, provincial LTT runs from 0.5% on the first $55,000 to 2.5% on the portion over $2 million. In Toronto, a matching Municipal Land Transfer Tax (MLTT) is layered on top. First-time buyers can claim a refund of up to $4,000 provincially and, per the City of Toronto, up to $4,475 more municipally.
Source: Ontario Ministry of Finance (ontario.ca, 2026) / City of Toronto (toronto.ca, 2026)
I’m Arthur Zhao. Of all the numbers that catch my GTA clients off guard on closing day, land transfer tax is the biggest — and inside the City of Toronto, you pay it twice: once to the province, once to the city. The good news: if you’re a first-time buyer, both levels of government offer a rebate, up to a combined $8,475. Here’s exactly how the brackets work, how the rebates work, and a full worked example on a realistic price — so you can budget this before you write an offer.
→
→
→
→
First, what land transfer tax is — and when you pay it
Land Transfer Tax (LTT) is a tax the buyer pays once, at closing, when a property changes hands. Your real estate lawyer collects and remits it on the closing date; it cannot be rolled into your mortgage and it is not refundable. According to the Ontario Ministry of Finance (ontario.ca, 2026), anyone acquiring an interest in land in Ontario owes provincial LTT. The catch: if the property sits inside the City of Toronto, you also owe a separate Municipal Land Transfer Tax (MLTT) — the same home is taxed once by the province and once by the city. That effectively doubles the tax versus a same-priced home elsewhere in Ontario, which is the closing cost out-of-town buyers underestimate most.
Ontario LTT: how the marginal brackets work
• First $55,000: 0.5%
• $55,000.01 – $250,000: 1.0%
• $250,000.01 – $400,000: 1.5%
• $400,000.01 – $2,000,000: 2.0%
• Portion over $2,000,000: 2.5% (for property with one or two single-family residences)
“Marginal” means you do not multiply the whole price by one rate — you stack the bands, the same way income tax works. So don’t estimate by multiplying the price by 2%; that overstates the bill.
⚠️Inside the City of Toronto, land transfer tax is charged twice — once by the province, once by the city — roughly double the bill on a same-priced 905 home. When you estimate closing costs on a Toronto purchase, always double the land transfer tax.
Toronto adds a second layer: the MLTT
💡 According to the Ontario Ministry of Finance (ontario.ca, 2026), eligible first-time buyers can claim a provincial LTT refund of up to $4,000 — enough to fully cover the provincial tax on a price of roughly $368,000. According to the City of Toronto (toronto.ca, 2026), first-time buyers in the city can claim an additional municipal MLTT rebate of up to $4,475, which fully covers the city tax on a home up to $400,000. The two stack: an eligible first-time buyer purchasing in Toronto can claim up to $8,475 back.
🚨First-time buyer eligibility turns on whether you or your spouse has ever owned a home anywhere in the world — even one property back home overseas, or a name once added to someone else’s title, can disqualify the rebate. Confirm this honestly before you claim, or risk having the rebate clawed back.
Who counts as a "first-time buyer"? The rules, line by line
• Be at least 18 years old
• Be a Canadian citizen or permanent resident (if you aren’t at closing, you have 18 months to gain status and then apply)
• Have never owned a home or an interest in a home anywhere in the world (even one property overseas disqualifies you)
• Have a spouse who did not own a home while being your spouse, if you’re married
• Occupy the home as your principal residence within 9 months of closing
• Apply within 18 months of registration
Key point: eligibility turns on whether you have ever owned, not whether you’ve bought in Canada — a home held abroad counts.
A full worked example: a $900,000 Toronto home
Say you buy a $900,000 home to live in inside the City of Toronto. Working the provincial brackets band by band:
• First $55,000 × 0.5% = $275
• $195,000 × 1.0% = $1,950
• $150,000 × 1.5% = $2,250
• $500,000 × 2.0% = $10,000
Provincial LTT = $14,475.
Toronto’s MLTT uses the same structure, so it is also $14,475.
Combined = $28,950.
If you’re an eligible first-time buyer, subtract the $4,000 Ontario refund + $4,475 Toronto rebate = $8,475:
Net land transfer tax = $20,475. (Calculated from ontario.ca and toronto.ca 2026 rate schedules.)
ℹ️The rebate is usually applied by your lawyer as an instant credit on closing day, so you simply pay less. If it’s missed at closing (e.g., status not yet confirmed), you can still apply within 18 months of registration.
How you actually get the rebate: instant credit at closing
Don’t confuse it with these two other taxes
Clients routinely mix land transfer tax up with two other things:
• Non-Resident Speculation Tax (NRST): per the Ontario Ministry of Finance, this is an extra one-time tax charged to foreign buyers on Ontario residential property — a different tax from the LTT in this article, and one local first-time buyers don’t face.
• Toronto’s Vacant Home Tax (VHT): that’s an annual municipal tax on empty homes, based on whether anyone lives there; land transfer tax is a one-time charge at purchase.
In short: land transfer tax is a one-time cost at closing — don’t map it onto the “every year” or “foreign buyers only” logic of those two.
Budget it before you write the offer
• Before you write an offer, run both the provincial and municipal tax through the brackets (in Toronto, remember to double it)
• If you’re a first-time buyer, subtract the $4,000 + $4,475 rebates to get your net cash requirement
• Fold that net number into your cash-beyond-down-payment budget alongside legal fees, inspection, and closing adjustments
This article is educational; confirm the exact tax and your rebate eligibility with your real estate lawyer and the current government rules.
Frequently Asked Questions
Do I really pay land transfer tax twice when buying in Toronto?
Yes. According to the Ontario Ministry of Finance and the City of Toronto (2026), a home inside the City of Toronto is subject to both provincial LTT and municipal MLTT, which share the same base bracket structure and are collected together at closing. That makes Toronto’s land transfer tax roughly double that of a same-priced home elsewhere in Ontario.
What is the maximum land transfer tax rebate for first-time buyers?
According to the Ontario Ministry of Finance (ontario.ca, 2026), the provincial refund is up to $4,000. According to the City of Toronto (toronto.ca, 2026), Toronto first-time buyers get an additional municipal rebate of up to $4,475. Stacked, an eligible first-time buyer in Toronto can claim up to $8,475 back.
How much land transfer tax is due on a $900,000 Toronto home?
Worked band by band, provincial LTT is about $14,475 and Toronto’s MLTT is the same at $14,475, for $28,950 combined. If you’re an eligible first-time buyer, subtracting the $4,000 + $4,475 rebates brings the net cost to about $20,475 (calculated from ontario.ca / toronto.ca 2026 rates).
I once owned a home overseas — do I still count as a first-time buyer?
Usually not. According to the Ontario Ministry of Finance and the City of Toronto (2026), the rebate requires that you (and your spouse during the marriage) have never owned a home or an interest in one anywhere in the world. A property you owned abroad counts and would disqualify the first-time buyer rebate.
Can land transfer tax be added to my mortgage and paid over time?
No. Land transfer tax must be paid in full, in cash, on closing day and cannot be financed into the mortgage. So before writing an offer, calculate both the provincial and municipal tax (doubled in Toronto) net of any rebate, and set that aside as cash on top of your down payment.
Arthur Zhao
Real Estate Broker · FRI · ABR · SRS · PSA · MCNE · E-PRO · CLHMS & GUILD Elite · REAIS
VP & Branch Manager, Bay Street Group Inc.
Get expert answers on buying, selling, and renting in the GTA
Discover more from GTA Real Estate Broker | Arthur Zhao
Subscribe to get the latest posts sent to your email.
