Closing costs
Ontario Land Transfer Tax: 2026 Guide + First-Time Buyer Rebates
· 7 min read · Rates and rules verified September 2026
Land transfer tax is the closing cost that surprises Ontario buyers most. It is not a small administrative fee — on a typical Toronto purchase it runs into five figures, it is due in full on closing day, and inside the City of Toronto you pay it twice. Here is exactly how it is calculated, what Toronto adds on top, and the first-time buyer rebates that can take thousands off the bill.
How Ontario land transfer tax works
Ontario charges land transfer tax on the purchase price of the property, calculated in marginal brackets — like income tax, each rate applies only to the slice of the price inside that bracket:
| Portion of purchase price | Tax rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 to $250,000 | 1.0% |
| $250,000 to $400,000 | 1.5% |
| $400,000 to $2,000,000 | 2.0% |
| Above $2,000,000 | 2.5% |
On a $600,000 home outside Toronto, that works out to $275 on the first $55,000, plus $1,950 on the next $195,000, plus $2,250 on the next $150,000, plus $4,000 on the final $200,000 — $8,475 in total. Your lawyer collects it as part of closing and remits it to the province; you never write a separate cheque to the government.
Toronto charges it a second time
The City of Toronto levies its own Municipal Land Transfer Tax (MLTT) on top of the provincial tax, using the same bracket structure. Buy within Toronto’s boundaries and you effectively pay the tax twice — once to Ontario, once to the city.
This is one of the largest line items in a Toronto buyer’s closing costs, and it is easy to underestimate if you budget using only the provincial numbers. It also means the first-time buyer rebates below are doubly valuable in Toronto, because there are two of them.
Worked example: $800,000 purchase in Toronto.
Ontario tax: $275 + $1,950 + $2,250 + $8,000 = $12,475.
Toronto MLTT (same brackets): $12,475.
Combined land transfer tax: $24,950 — due on closing day, before any rebates.
First-time buyer rebates: up to $4,000 + $4,475
Ontario offers first-time buyers a rebate of up to $4,000 against the provincial tax, and Toronto offers a separate rebate of up to $4,475 against the MLTT. A qualifying first-time buyer in Toronto can therefore recover up to $8,475 of that $24,950 bill — a meaningful reduction, though far from wiping it out.
To qualify as a first-time buyer, the core conditions are:
- You have never owned a home anywhere in the world — not just in Ontario or Canada.
- The home will be your principal residence, which you must occupy within nine months of closing.
- You are at least 18 years old and a Canadian citizen or permanent resident.
- Your spouse’s ownership history counts too: if your spouse owned a home while you were married or in a qualifying partnership, you generally do not qualify.
The rebate is claimed through your real estate lawyer as part of the closing process — it is applied against the tax owing rather than paid out to you later. If your calculated tax is less than the maximum rebate, you receive a rebate equal to the tax (you cannot profit from it).
Common questions
Does land transfer tax apply when refinancing? No. Refinancing does not change who owns the property, so no transfer occurs and no tax is due. The tax is triggered by a change in registered ownership.
What about transfers between spouses? Transfers of a matrimonial home between spouses are generally exempt from Ontario land transfer tax. Other family transfers — a parent gifting a property to an adult child, for example — are generally not exempt, and the tax is calculated on the property’s fair market value even if no money changes hands.
I owned a home fifteen years ago. Am I a first-time buyer? For the rebates, no. “First-time buyer” means never having owned a home anywhere in the world, at any time. There is no reset after a waiting period.
Does the tax apply to new builds? Yes. Newly constructed homes are subject to land transfer tax on the purchase price, and first-time buyer rebates apply to new builds the same way they apply to resales.
How this fits into your total closing costs
Land transfer tax is usually the single biggest closing cost, but budget for the rest: legal fees and disbursements ($1,500–$2,500), title insurance (a few hundred dollars), property tax and utility adjustments, and moving costs. All in, Ontario buyers should budget 1.5% to 4% of the purchase price in closing costs beyond the down payment — and remember that land transfer tax must be paid in cash on closing day. It cannot be rolled into your mortgage.
Weighing whether those upfront costs are worth it at all? Our renting vs buying guide for Toronto puts land transfer tax and the other sunk costs of buying into the full comparison.