Key Takeaways
- 1.Ontario provincial LTT on a $900K home is $14,475. In Toronto, the municipal LTT adds another $14,475, doubling the total to $28,950. In Mississauga, you pay the provincial tax only.
- 2.First-time buyers can claim up to $4,000 from Ontario and $4,475 from Toronto for a combined maximum rebate of $8,475 — but on a $900K home this covers only 29% of the double tax.
- 3.After refunds, a first-time buyer in Toronto owes $20,475 in land transfer tax. The same buyer in Mississauga owes $10,475 — a $10,000 closing-cost gap.
- 4.The tax is collected at closing through your lawyer's trust account — you need the full amount in cash on closing day, separate from your down payment.
- 5.The $14,475 municipal LTT savings is the single biggest financial reason GTA buyers choose 905-area municipalities over the City of Toronto at the same price point.
Ontario Provincial vs. Toronto Municipal LTT: The Bracket Structure
Every property buyer in Ontario pays the Ontario Land Transfer Tax. Buyers purchasing within the City of Toronto also pay the Toronto Municipal Land Transfer Tax (MLTT), which has been in effect since February 2008. Toronto is the only municipality in Ontario with this power, granted under the City of Toronto Act, 2006. Mississauga, Brampton, Vaughan, Markham, and every other GTA city charge only the provincial tax.
The two taxes use nearly identical marginal bracket structures, which is why Toronto buyers pay almost exactly double. Here are the current 2025 rates for both.
| Purchase Price Bracket | Ontario Rate | Toronto Rate |
|---|---|---|
| First $55,000 | 0.5% | 0.5% |
| $55,001 – $250,000 | 1.0% | 1.0% |
| $250,001 – $400,000 | 1.5% | 1.5% |
| $400,001 – $2,000,000 | 2.0% | 2.0% |
| Over $2,000,000 | 2.5% | 2.0% |
The highlighted $400,001–$2,000,000 bracket is where the $900K purchase price falls. Both taxes apply the same 2.0% marginal rate on this portion. The 2.5% Ontario bracket only applies above $2M for single-family residences.
Because the brackets are identical up to $2M, a Toronto buyer at any price point under $2M pays almost exactly double what a buyer in Mississauga pays on the same home. For a deeper breakdown at $800K, $1.2M, and $2M price points, see our Ontario + Toronto double LTT calculator.
Worked Example: $900K Home in Toronto (Double Tax)
Ontario Provincial LTT on $900,000:
First $55,000 × 0.5% = $275
$55,001 – $250,000 ($195,000) × 1.0% = $1,950
$250,001 – $400,000 ($150,000) × 1.5% = $2,250
$400,001 – $900,000 ($500,000) × 2.0% = $10,000
Ontario LTT: $14,475
Toronto Municipal LTT on $900,000:
First $55,000 × 0.5% = $275
$55,001 – $250,000 ($195,000) × 1.0% = $1,950
$250,001 – $400,000 ($150,000) × 1.5% = $2,250
$400,001 – $900,000 ($500,000) × 2.0% = $10,000
Toronto MLTT: $14,475
Combined LTT: $14,475 + $14,475 = $28,950
Effective rate: $28,950 ÷ $900,000 = 3.22%
That $28,950 represents 3.22% of the purchase price — money that must be available in cash at closing on top of the down payment, legal fees, title insurance, and any other closing costs. For a buyer putting 20% down ($180,000), the land transfer tax alone adds 16.1% on top of the down payment requirement.
Worked Example: $900K Home in Mississauga (Single Tax)
Ontario Provincial LTT on $900,000:
First $55,000 × 0.5% = $275
$55,001 – $250,000 ($195,000) × 1.0% = $1,950
$250,001 – $400,000 ($150,000) × 1.5% = $2,250
$400,001 – $900,000 ($500,000) × 2.0% = $10,000
Ontario LTT: $14,475
Toronto Municipal LTT: $0 (Mississauga is outside City of Toronto boundaries)
Total LTT: $14,475
Effective rate: $14,475 ÷ $900,000 = 1.61%
The Mississauga buyer pays exactly half. The $14,475 difference is not a small number — it is more than many buyers contribute to their RRSP in an entire year. And unlike the purchase price, which is financed through a mortgage, the land transfer tax is a pure cash outlay at closing that builds no equity. For context on provinces with no transfer tax at all, see our Alberta zero land transfer tax comparison.
First-Time Buyer Refunds: The $4,000 and $4,475 Caps
Ontario and Toronto each offer a first-time buyer refund, but the caps have not kept pace with GTA home prices. At $900K, both refunds are deeply eroded relative to the total tax owing.
Ontario Provincial Refund
The Ontario Land Transfer Tax Refund for eligible first-time buyers is a maximum of $4,000. This amount fully covers the Ontario LTT on homes up to $368,000. For homes priced above $368,000 (which includes virtually every freehold and most condos in the GTA), the $4,000 refund is a fixed dollar benefit — it does not increase with the purchase price.
On a $900K home, the $4,000 refund offsets 27.6% of the $14,475 provincial tax, leaving $10,475 owing.
Toronto Municipal Refund
First-time buyers in Toronto can also claim the Toronto MLTT Rebate, capped at $4,475. This fully covers the municipal tax on homes up to approximately $400,000. Above that threshold, the rebate is fixed at $4,475 regardless of the purchase price.
On a $900K home, the $4,475 rebate offsets 30.9% of the $14,475 municipal tax, leaving $10,000 owing on the Toronto portion.
Combined Impact at $900K
Toronto First-Time Buyer (both refunds):
Ontario LTT: $14,475
Ontario refund: −$4,000
Toronto MLTT: $14,475
Toronto rebate: −$4,475
Net LTT owing: $20,475
Mississauga First-Time Buyer (Ontario refund only):
Ontario LTT: $14,475
Ontario refund: −$4,000
Net LTT owing: $10,475
First-time buyer closing-cost gap: $10,000
Even after claiming every available refund, a first-time buyer in Toronto still pays $10,000 more in land transfer tax than the same buyer in Mississauga at the same $900K price point. For repeat buyers who do not qualify for any refund, the gap is the full $14,475.
Full Comparison Table: Toronto vs. Mississauga at $900K
| Line Item | Toronto | Mississauga | Delta |
|---|---|---|---|
| Ontario Provincial LTT | $14,475 | $14,475 | $0 |
| Toronto Municipal LTT | $14,475 | $0 | +$14,475 |
| Total LTT (before refunds) | $28,950 | $14,475 | +$14,475 |
| Ontario first-time refund | −$4,000 | −$4,000 | $0 |
| Toronto first-time rebate | −$4,475 | N/A | −$4,475 |
| Net LTT (first-time buyer) | $20,475 | $10,475 | +$10,000 |
| Net LTT (repeat buyer) | $28,950 | $14,475 | +$14,475 |
| Effective rate (before refunds) | 3.22% | 1.61% | +1.61% |
All figures based on a $900,000 residential purchase price. First-time buyer refunds assume full eligibility. The Toronto MLTT rebate is only available for purchases within City of Toronto boundaries.
How the Tax Is Collected at Closing
Land transfer tax is not something you pay online or at a government counter. It flows through your real estate lawyer's trust account as part of the closing process. Here is the sequence:
Before closing, your lawyer prepares a statement of adjustments showing every dollar that needs to change hands: the purchase price balance (after your deposit), land transfer tax, legal fees, title insurance, property tax adjustments, and any other costs. You transfer the full amount to your lawyer's trust account — typically by certified cheque or wire transfer — several business days before closing.
On closing day, your lawyer registers the deed with the Ontario Land Registry Office. The land transfer tax is remitted electronically to the province (and to the City of Toronto, if applicable) at the time of registration. The registration cannot proceed without payment — the tax is a condition of the transfer, not an optional charge.
For first-time buyers, the Ontario refund is typically applied immediately at registration, reducing the cash needed. The Toronto rebate may also be applied at closing if your lawyer files the municipal rebate application simultaneously. Some lawyers process the Toronto rebate as a post-closing refund, which means you need the full $28,950 in cash on closing day and receive $4,475 back weeks later. Confirm the process with your lawyer before closing to ensure you have adequate funds.
Why the $14,475 Gap Matters More Than It Looks
The land transfer tax difference between Toronto and Mississauga is not just a line item — it has compounding effects on the overall home purchase.
First, unlike the purchase price, the land transfer tax cannot be financed through a conventional mortgage. It is a pure cash outlay. A buyer who has saved $200,000 for a 20% down payment on a $900K home still needs an additional $28,950 (Toronto) or $14,475 (Mississauga) in liquid cash for the tax alone, plus legal fees ($1,500–$2,500), title insurance ($300–$500), and other closing costs.
Second, the $14,475 municipal tax builds zero equity. Every dollar of your down payment reduces your mortgage principal and accrues value as the property appreciates. Every dollar of land transfer tax is gone permanently. Over a 25-year mortgage at 5% interest, a $14,475 reduction in principal would save approximately $11,200 in interest — making the true opportunity cost of the Toronto MLTT closer to $25,000. For more on how mortgage qualification works in the current rate environment, see our mortgage stress test calculator.
905 vs. 416: The LTT Factor in Location Decisions
The Toronto municipal land transfer tax is one of the most frequently cited reasons buyers choose 905-area municipalities over the City of Toronto (area code 416/647). At every price point, the math is straightforward: buying outside Toronto saves the full municipal tax.
But the decision is not purely financial. Toronto offers direct subway and streetcar access, walkable neighbourhoods, and proximity to downtown employment. Mississauga has its own advantages: newer housing stock in many areas, the Hurontario LRT under construction, lower property tax rates in some zones, and of course the LTT savings. The right choice depends on commute patterns, lifestyle preferences, and total cost of ownership including property taxes and transportation costs.
What the land transfer tax comparison does establish is the magnitude of the closing-cost difference. For a first-time buyer, $10,000 is real money — it could be the difference between a comfortable closing and a stretched one. For repeat buyers, the $14,475 gap is even more significant because they have no refund to offset the municipal tax at all.
How This Compares to Other Provinces
Ontario's provincial LTT at $14,475 on a $900K home is already among the highest in Canada, but the Toronto municipal tax pushes the combined total to a level that no other Canadian city matches. For comparison: Alberta charges no land transfer tax at all — a Calgary buyer at $900K pays $0 in transfer tax. British Columbia charges a property transfer tax that would total approximately $16,000 on a $900K home in Vancouver (1% on the first $200K, 2% on $200K–$2M), though BC offers a first-time buyer exemption on homes up to $500K. For the full BC breakdown, see our BC property transfer tax calculator.
The takeaway: a $900K buyer in Toronto pays $28,950 in combined land transfer tax. The same buyer in Calgary pays $0. The same buyer in Mississauga pays $14,475. And the same buyer in Vancouver pays approximately $16,000. Toronto's double-tax structure makes it the most expensive city in Canada for property transfer costs at any price point.
First-Time Buyer Eligibility: What Qualifies
Both the Ontario and Toronto refunds share similar eligibility criteria, but they are separate applications with independent requirements:
Ontario Land Transfer Tax Refund ($4,000 max): You must be at least 18 years old, a Canadian citizen or permanent resident, have never owned an eligible interest in a home anywhere in the world (not just Ontario), and occupy the property as your principal residence within nine months of the transfer date. If you are buying with a spouse or partner who has previously owned a home, you may claim only a proportional share of the refund.
Toronto MLTT Rebate ($4,475 max): Similar criteria apply. You must not have previously owned a home anywhere in the world, the property must be within the City of Toronto, and it must be your principal residence. The Toronto rebate has historically been slightly more generous than the Ontario refund ($4,475 vs. $4,000), but both are dwarfed by the tax at $900K.
If you are a first-time buyer evaluating whether to use your FHSA or RRSP Home Buyers' Plan for the down payment, our FHSA vs. RRSP Home Buyers' Plan comparison walks through the tax savings of each approach.
Important Disclaimer
This article provides general information about Ontario and Toronto land transfer taxes as of 2025. Tax brackets, rates, and first-time buyer refund caps are based on current provincial and municipal schedules and may change through legislation. The worked examples assume a standard residential property purchase with no special exemptions or adjustments. Actual tax owing may vary based on property type, the structure of the transaction, and individual eligibility for refunds. Land transfer tax is one component of closing costs — buyers should also budget for legal fees, title insurance, property tax adjustments, and home inspection costs. This is not financial or legal advice. Consult a qualified real estate lawyer or tax professional for guidance specific to your situation.