Land Transfer Tax in Ontario: Complete 2026 Guide with Examples

Land transfer tax (LTT) is one of the largest closing costs when buying property in Canada — and Ontario buyers face a double hit: provincial tax plus Toronto's municipal tax if applicable. Yet many buyers are caught off guard by the bill at closing. This guide covers every bracket, every rebate, and every strategy to minimize what you owe.

What Is Land Transfer Tax?

Land transfer tax is a provincial tax paid when ownership of a property transfers from seller to buyer. It is paid by the buyer — not the seller — at the time of closing. Unlike the US, where transfer taxes are minimal in most states, Canadian provinces charge a percentage of the purchase price using progressive tax brackets.

The tax is due on closing day and must be paid from your own funds (it cannot be rolled into your mortgage). It forms a significant portion of closing costs, which typically total 1.5%–4% of the purchase price.

Ontario Provincial Land Transfer Tax Brackets

Ontario uses a progressive bracket system, similar to income tax. You pay the marginal rate on each portion of the purchase price within each bracket.

Worked Examples — Ontario Provincial LTT

Toronto Municipal Land Transfer Tax

Toronto is one of the only cities in Canada that charges its own municipal land transfer tax — on top of the provincial LTT. If you buy a property within the City of Toronto (not just the GTA — specifically the old city boundaries), you pay both taxes.

The Toronto municipal LTT uses its own bracket structure (very similar to Ontario's):

First-Time Home Buyer Rebates

Both Ontario and Toronto offer rebates to first-time home buyers, which can significantly reduce your LTT bill at closing.

Ontario First-Time Buyer Rebate

• Maximum rebate: $4,000 (effectively the full LTT on a purchase up to ~$368,000)
• Eligibility: You must be a Canadian citizen or permanent resident, be at least 18 years old, and have never owned a home anywhere in the world
• Property requirement: Must be your principal residence within 9 months of purchase
• On purchases over $368,000: The $4,000 maximum applies — you still pay LTT on the amount above ~$368,000

Toronto Municipal Rebate

• Maximum rebate: $4,475
• Same eligibility rules as the provincial rebate
• Combined Toronto savings: Up to $8,475 for eligible first-time buyers

Land Transfer Tax in Other Provinces

Strategies to Minimize Land Transfer Tax

• Know your first-time buyer eligibility: Both you and a co-purchaser must qualify independently — if your co-buyer previously owned, the rebate is proportionally reduced.
• Consider properties outside Toronto: Buying in Mississauga, Brampton, or North York (which is now City of Toronto) vs. Scarborough or Etobicoke can affect municipal LTT exposure — check the exact city boundaries.
• Factor LTT into your offer price: On a $900K Toronto purchase, you're paying $32,950 in LTT. Include this in your negotiation if the seller is motivated.
• Budget for it separately: LTT cannot be added to your mortgage. It must come from cash on hand at closing, alongside your down payment and legal fees.

Frequently Asked Questions

When do you pay land transfer tax in Ontario?

Land transfer tax is paid at the time of closing (completion of the sale). Your real estate lawyer typically handles the payment on your behalf as part of the closing funds you provide. You cannot defer or installment-pay LTT.

Is land transfer tax deductible?

For a principal residence, LTT is not tax-deductible. For investment (rental) properties, LTT is considered part of the cost of the property and can be added to your adjusted cost base (ACB), which reduces your capital gain when you eventually sell. It is not directly deductible against rental income.

Does land transfer tax apply when refinancing?

No. LTT only applies when ownership transfers — i.e., when you buy a property. Refinancing (changing your mortgage terms or lender without selling) does not trigger LTT.