Toronto Land Transfer Tax Explained: What You’ll Pay and Why It Matters

If you’re planning to buy a home in Toronto, there’s a good chance you’ve heard whispers—or maybe loud groans—about the dreaded Toronto Land Transfer Tax. And honestly? It’s not just another random fee. This tax adds thousands of dollars to your closing costs, and for many buyers, especially first-timers, it can feel like an unexpected gut punch.
Let’s unpack everything you need to know about the Toronto Land Transfer Tax, from how it’s calculated to whether you can reduce it (spoiler: yes, a little). Whether you’re eyeing a trendy downtown condo or a detached home in East York, understanding this tax could save you some serious stress—and help you budget like a pro.

So here’s the deal: back in 2008, the City of Toronto decided to introduce its own Municipal Land Transfer Tax (MLTT) on top of the Ontario provincial land transfer tax. That means if you’re buying a property within Toronto’s city limits—basically from Steeles Avenue in the north to Lake Ontario in the south, between Etobicoke in the west and Scarborough-Pickering Townline in the east—you’ll be paying two land transfer taxes: one to the province, and one to the city.
This tax applies whether you’re buying a brand-new condo or an older resale home. There’s no avoiding it if the property is located within Toronto’s boundary.

The official reason? To help fund municipal services and infrastructure. In fact, the revenue from Toronto’s land transfer tax now makes up around 5% of the city’s entire budget. It’s helped pay for public housing, transit projects, and more. But for homebuyers, it’s an extra financial hurdle to prepare for.

How Does the Land Transfer Tax Work in Toronto?

The MLTT, like the provincial tax, is calculated using a marginal tax rate system. That means different parts of your purchase price are taxed at different rates. The more your home costs, the more you’ll pay—but not in a flat way. It’s kind of like income tax brackets.

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Toronto Land Transfer Tax Example (With a ₹1 Cr Home)

Imagine you’re buying a home in Toronto for $1,000,000. Here’s how the municipal portion of the land transfer tax would be calculated:

• The first $55,000 is taxed at 0.5% = $275
• The portion from $55,000.01 to $250,000 is taxed at 1% = $1,950
• The next slice up to $400,000 is taxed at 1.5% = $2,250
• The remainder from $400,000.01 to $1,000,000 is taxed at 2% = $12,000

That adds up to $16,475 for the MLTT—and remember, you’ll owe the exact same amount again for the Ontario Land Transfer Tax, bringing the total to $32,950.
Now, if you’re a first-time homebuyer, you might qualify for rebates that reduce this amount. With the maximum rebates applied, you’d pay $24,475 instead of $32,950—better, but still significant.

Toronto MLTT Rate Chart

For reference, here’s how Toronto’s MLTT is structured for single-family residences:

• Up to $55,000 – 0.5%
• $55,000.01 to $250,000 – 1%
• $250,000.01 to $400,000 – 1.5%
• $400,000.01 to $2,000,000 – 2%
• Over $2,000,000 – 2.5%

If you’re buying a multi-residential, commercial, or industrial property, the rates top out at 2% instead of 2.5%.

How Toronto’s Land Transfer Tax Compares to Other Cities

Buying in Mississauga or Vaughan instead? Good news: you only pay the provincial land transfer tax. That’s half the cost compared to Toronto.
Other cities in Canada also differ:

• In Calgary and Edmonton, there’s no land transfer tax at all—just a small registration fee.
• In Montreal, the tax rates vary by borough, with the central boroughs charging more.
• Vancouver has a progressive provincial land transfer tax, but no municipal one.

Basically, Toronto is the only city in Canada that charges a full-blown second tax on top of the provincial one, making it the most expensive place in the country to pay land transfer fees.

Has the MLTT Always Been This High?

Nope. When it was first introduced in 2008, Toronto’s land transfer tax only had three brackets, maxing out at 2%. But in 2017, the city council updated the structure and added two new tiers—including the 2.5% rate for properties above $2 million.
So if you’re buying luxury real estate in Toronto, you’ll definitely feel the impact.

If you’re not a Canadian citizen or permanent resident, be ready for another cost: the Non-Resident Speculation Tax (NRST).
This tax is 25% of the purchase price and applies across Ontario—not just Toronto. It’s meant to curb foreign investment and cool down housing prices. And it’s on top of both the provincial and municipal land transfer taxes.
On top of that, as of January 1, 2023, the federal government enacted a two-year ban on most foreign home purchases in Canada. So unless you’re exempt (e.g., international students, refugees, etc.), you might not be able to buy at all right now.

It’s due at closing. Your real estate lawyer will handle the payment when the property is officially transferred to your name. You won’t have to go to City Hall and pay it yourself—just make sure it’s factored into your final closing costs.
Usually, your lawyer will give you a closing summary showing the exact amount of MLTT, the provincial LTT, legal fees, and any other costs.

There’s no way around the tax unless you’re eligible for a rebate. First-time homebuyers can receive up to $4,000 off the Ontario portion and $4,475 off the Toronto portion, which helps—but doesn’t erase the cost.
These rebates are only available if:

• You’re a Canadian citizen or permanent resident
• You’ve never owned a home anywhere in the world
• You occupy the home within nine months of purchase

If you’re buying jointly with someone who has owned before, your rebate may be reduced proportionally.

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FAQs

Do I need to pay Toronto land transfer tax on a condo?
Yes—condos, detached homes, townhouses—if it’s in Toronto, you pay the tax.
Is the tax included in my mortgage?
No. Land transfer tax is part of your closing costs and must be paid upfront. It cannot be rolled into your mortgage loan.
Does the tax apply to investment properties?
Absolutely. In fact, you won’t qualify for rebates if the home is not your primary residence.
How can I calculate it quickly?
Use a Toronto land transfer tax calculator online. Just input your purchase price and first-time buyer status—it’ll do the math.

Final Thoughts: Budget Smart for the Land Transfer Tax

Whether you’re a savvy investor or buying your very first place, understanding the Toronto Land Transfer Tax is crucial. It’s not just a bureaucratic formality—it’s one of the biggest upfront costs you’ll face, sometimes running into tens of thousands of dollars.
But when you plan for it, get your rebates in place, and work with a good mortgage broker and real estate lawyer, it doesn’t have to be a dealbreaker.
So, if Toronto is where your dream home is, don’t let the tax scare you off. Just go in informed, budget wisely, and get expert help along the way.

Buying in Toronto? Know Your Land Transfer Tax

Toronto buyers pay two land transfer taxes — not just one. Our guide helps you calculate exactly what you’ll owe, how rebates work, and why this tax can impact your closing budget more than you think.
Understand Toronto’s Land Transfer Tax Now