Key takeaways
- Ontario LTT generally applies when you acquire land or a beneficial interest in land, subject to exemptions, and is based on the value of the consideration — not always just the price on the agreement.
- Rates are marginal (tiered), so only the portion of the value within each bracket is taxed at that bracket’s rate.
- Properties in the City of Toronto pay a separate Municipal Land Transfer Tax on top of the provincial tax; the 905 regions do not. Buyers who are not Canadian citizens or permanent residents may also owe Ontario’s Non-Resident Speculation Tax and, in Toronto, a municipal equivalent.
- First-time buyers may qualify for refunds — up to $4,000 provincially and up to $4,475 municipally in Toronto. These are usually netted off at registration, but not always.
What is Land Transfer Tax?
Land Transfer Tax is a tax the Province of Ontario charges when a person acquires land or a beneficial interest in land. It generally applies to acquisitions of real property, but it is subject to statutory exemptions and special rules, so it is not accurate to say it applies to every single home purchase without qualification. For most ordinary residential purchases, though, you can expect to pay it.
One point that trips up a lot of buyers: the tax is calculated on the value of the consideration for the acquisition, not simply the number written in your agreement of purchase and sale. Consideration is broader than “the price.” It can include liabilities you assume as part of the deal — for example, an existing mortgage the buyer takes on — as well as other benefits given as part of the transaction. In a typical arm’s-length purchase where you pay cash and a new mortgage, the consideration and the purchase price line up. In less typical deals, they may not, which is exactly why it is worth having your lawyer confirm the figure the tax is calculated on.
The tax also distinguishes between land with one or two single-family residences and other types of property (such as commercial or multi-unit land), because the top rate bracket described below applies specifically to land containing one or two single-family residences. For most buyers of a house or condo to live in, that residential treatment is what applies.
What are the Ontario rate brackets?
Ontario uses marginal rates. That means each slice of the value is taxed at the rate for its bracket — you do not pay a single flat rate on the whole amount. Here are the provincial brackets:
| Portion of the value of the consideration | Ontario LTT 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% |
| Over $2,000,000 (land with one or two single-family residences) | 2.5% |
Because the rates are marginal, a $300,000 home is not taxed entirely at 1.5%. The first $55,000 is taxed at 0.5%, the next slice up to $250,000 at 1.0%, and only the portion between $250,000 and $300,000 at 1.5%.
How do I calculate it quickly?
The commonly quoted “value × 2% − $3,525” shortcut works above $400,000, but for land with one or two single-family residences it stops at $2 million, because a 2.5% bracket takes over above that. So it is not correct to say it applies to “any home over $400,000.”
Here are the two shortcuts and the ranges they apply to:
| Value of the consideration | Quick Ontario LTT formula |
|---|---|
| Above $400,000 and up to $2,000,000 | (value × 2%) − $3,525 |
| Above $2,000,000 (one/two single-family residences) | (value × 2.5%) − $13,525 |
Worked example. For an $800,000 home:
- $800,000 × 2% = $16,000
- $16,000 − $3,525 = $12,475 in Ontario LTT
That single line does the work of adding up all four lower brackets, and it lands on the same answer.
What if my property is in Toronto?
If the property is inside the City of Toronto, you pay a separate Municipal Land Transfer Tax (MLTT) on top of the provincial tax. The City of Toronto here means the amalgamated city — the former municipalities of Old Toronto, North York, Scarborough, Etobicoke, York and East York. It does not include the surrounding 905 regions such as Mississauga, Brampton, Markham or Vaughan. A home in those areas pays only the provincial LTT.
Below $2 million, the municipal brackets mirror the provincial ones. But effective April 1, 2026, Toronto added higher “luxury” rates on high-value residential property. Here is the full municipal table:
| Portion of the value of the consideration | Toronto MLTT 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% |
| $2,000,000 to $3,000,000 | 2.5% |
| $3,000,000 to $4,000,000 | 4.40% |
| $4,000,000 to $5,000,000 | 5.45% |
| $5,000,000 to $10,000,000 | 6.50% |
| $10,000,000 to $20,000,000 | 7.55% |
| Over $20,000,000 | 8.60% |
You may hear that “Toronto roughly doubles the bill.” That is only a rough shorthand in the lower brackets, where the municipal and provincial rates match. It is not true for high-value one-or two-family residential property after the April 2026 luxury increase, where the municipal rates climb well above the provincial ones.
Worked example. For an $800,000 home in Toronto:
- Provincial LTT: $12,475
- Municipal LTT: $12,475
- Total: about $24,950
At $800,000 the two happen to match, so the “double” shorthand holds here — but do not assume it scales to luxury-priced homes.
Are there refunds for first-time buyers?
Yes, and they are worth knowing about because they are claimed at closing.
- Ontario refund: up to $4,000 off the provincial LTT. That fully covers the tax on a home priced up to about $368,000; above that you pay the difference. You must be at least 18, a Canadian citizen or permanent resident, and occupy the home as your principal residence within nine months. You cannot have owned a home or an interest in one anywhere in the world — and, importantly, your spouse cannot have owned one anywhere in the world while they were your spouse. A home your spouse owned before you became spouses does not disqualify you.
- Toronto refund: up to $4,475 off the municipal LTT for eligible first-time buyers, covering a home priced up to $400,000. The conditions mirror the provincial ones.
These two refunds are separate from each other and separate from any other rebate or incentive you might read about, so don’t mix them together. Where you qualify and the refund is claimed through electronic registration, the amount is netted off the tax payable and you do not have to front it. That is the usual path, but it is not guaranteed. If the claim is not made at registration — for example, because eligibility cannot be confirmed in time, or because you were not yet a Canadian citizen or permanent resident on closing — the tax is paid in full and a refund application is made to the Ministry of Finance afterward, within 18 months of registration. Your lawyer does not simply “claim” the refund on your say-so either: the lawyer completes the required statements in the electronic land transfer tax affidavit based on declarations you make, which is why the eligibility questions matter.
What if I am not a Canadian citizen or permanent resident?
- Then two further taxes may apply on top of the ordinary Land Transfer Tax, and they are substantial. They are worth understanding before you sign anything.
- Ontario’s Non-Resident Speculation Tax (NRST) is 25% of the value of the consideration. It has applied province-wide at that rate since 25 October 2022. It applies to purchases of residential property by foreign nationals, foreign corporations and taxable trustees.
- Toronto’s Municipal Non-Resident Speculation Tax (MNRST) is 10%, effective 1 January 2025, on certain residential purchases in the City of Toronto. It is charged in addition to the municipal Land Transfer Tax. Confirm the scope and any exemptions with your lawyer, as the municipal rules are not identical to the provincial ones.
- On a $1,000,000 Toronto home, that 25% provincial charge alone is $250,000 on top of the ordinary taxes. It is not a rounding error, and it is not something to discover a week before closing.
- Exemptions exist under the provincial tax — for nominees under the Ontario Immigrant Nominee Program, protected persons, and spouses of a Canadian citizen, permanent resident, nominee or protected person — but each carries conditions, including that every transferee certify an intention to occupy the property as a principal residence within 60 days of registration. There is also a rebate where a foreign national becomes a permanent resident within four years of registration, applied for within 180 days of obtaining that status. The transitional rebates for international students and foreign workers have expired and are no longer accepted.
- A separate federal law, the Prohibition on the Purchase of Residential Property by Non-Canadians Act, also restricts purchases by non-Canadians. It is currently set to expire on 1 January 2027. Because that date falls shortly after this article was written, confirm its status before relying on it.
- One warning that matters more than any rate: the residency and citizenship tests are not the same across these programs. Being a tax resident of Canada is not the same as being a permanent resident, and qualifying for one exemption does not mean you qualify for another. If any buyer on title is not a Canadian citizen or permanent resident, get advice before the offer goes firm, not after.
Are gifts and transfers between family exempt?
This is a common misunderstanding, so be careful. A no-consideration family gift is not an “exemption” under Ontario’s Land Transfer Tax Act — the Act does not exempt gifts as such. What actually happens is this: if truly no consideration passes, the tax calculated on nil consideration is nil. But if the person receiving the property assumes a mortgage or other debt, that assumed debt is generally consideration, and it is taxable.
There are specific statutory exemptions — for example, certain transfers between spouses — but they have their own conditions. Because the line between “no consideration” and “consideration was given” can be subtle, and because the exemptions are narrow, confirm any gift, family transfer or claimed exemption with your lawyer before assuming no tax is owed.
When and how is the tax paid?
You will not normally see Land Transfer Tax on the seller’s statement of adjustments. That document apportions shared costs such as property taxes between you and the seller. Land Transfer Tax is a tax on your acquisition, so it appears in your lawyer’s trust or closing-funds statement — the calculation of the total you have to send — and is remitted through the electronic registration of the transfer.