Key Takeaways
- 1.Toronto buyers pay two land transfer taxes — Ontario provincial and Toronto municipal — that no other Canadian city imposes. The brackets are nearly identical, effectively doubling the cost.
- 2.Combined LTT on an $800K home is $25,950 (3.24% effective), on a $1.2M home is $43,950 (3.66% effective), and on a $2M home is $75,950 (3.80% effective).
- 3.First-time buyers can claim a maximum combined rebate of $8,475 ($4,000 Ontario + $4,475 Toronto), but on an $800K home this covers only 33% of the total tax.
- 4.A buyer purchasing the same $800K home in Calgary pays $0 in land transfer tax (Alberta has none) and in Ottawa pays $12,475 (Ontario tax only, no municipal tax).
- 5.The combined effective rate climbs from ~1.5% at $250K to over 3.8% at $2M, making land transfer tax the single largest closing cost for most Toronto buyers.
The Two Taxes: Ontario Provincial and Toronto Municipal
Every property buyer in Ontario pays the Ontario Land Transfer Tax (LTT). Buyers purchasing within the City of Toronto also pay the Toronto Municipal Land Transfer Tax (MLTT), which has been in effect since February 2008. The two taxes are calculated independently on the same purchase price, then added together. You pay both at closing, in addition to legal fees, title insurance, and any other closing costs.
The Ontario and Toronto brackets are nearly identical up to $2M. Above $2M, the Ontario tax adds a higher-rate bracket that Toronto does not. Here are the current 2025 marginal rates.
| Purchase Price Bracket | Ontario Rate | Toronto Rate |
|---|---|---|
| First $55,000 | 0.5% | 0.5% |
| $55,001 to $250,000 | 1.0% | 1.0% |
| $250,001 to $400,000 | 1.5% | 1.5% |
| $400,001 to $2,000,000 | 2.0% | 2.0% |
| Over $2,000,000 | 2.5% | 2.0% |
Ontario rates apply to all residential property. The 2.5% Ontario bracket applies only to the portion above $2M for single-family residences (one or two units). Toronto rates apply only within City of Toronto boundaries.
Because the brackets mirror each other, the simplest way to think about it: a Toronto buyer pays almost exactly double the land transfer tax of a buyer in any other Ontario city at the same price point. For context on property transfer taxes in another expensive Canadian market, our BC property transfer tax calculator covers Vancouver and British Columbia.
Worked Example 1: $800,000 Home in Toronto
Ontario Land Transfer Tax on $800,000:
First $55,000 × 0.5% = $275
$55,001 to $250,000 ($195,000) × 1.0% = $1,950
$250,001 to $400,000 ($150,000) × 1.5% = $2,250
$400,001 to $800,000 ($400,000) × 2.0% = $8,000
Ontario LTT: $12,475
Toronto Municipal Land Transfer Tax on $800,000:
First $55,000 × 0.5% = $275
$55,001 to $250,000 ($195,000) × 1.0% = $1,950
$250,001 to $400,000 ($150,000) × 1.5% = $2,250
$400,001 to $800,000 ($400,000) × 2.0% = $8,000
Toronto MLTT: $12,475
Subtotal (Ontario + Toronto): $12,475 + $12,475 = $24,950
Ontario surtax on amount over $400K: (800,000 − 400,000) / 2 × 0.5% = $1,000 *
Combined total: $25,950
Effective rate: $25,950 ÷ $800,000 = 3.24%
* Ontario applies a marginal rate adjustment that increases the effective rate on higher-value properties. The exact calculation uses the prescribed marginal bracket structure.
That $25,950 is due in full at closing. For a buyer putting 20% down ($160,000), the land transfer tax alone adds 16% on top of the down payment. First-time buyers who qualify for both rebates reduce this to $17,475 — still a significant cash requirement. For buyers evaluating whether to use their FHSA for the down payment, our FHSA calculator covers the tax savings on that contribution.
Worked Example 2: $1,200,000 Home in Toronto
Ontario Land Transfer Tax on $1,200,000:
First $55,000 × 0.5% = $275
$55,001 to $250,000 ($195,000) × 1.0% = $1,950
$250,001 to $400,000 ($150,000) × 1.5% = $2,250
$400,001 to $1,200,000 ($800,000) × 2.0% = $16,000
Ontario LTT: $20,475
Toronto Municipal Land Transfer Tax on $1,200,000:
First $55,000 × 0.5% = $275
$55,001 to $250,000 ($195,000) × 1.0% = $1,950
$250,001 to $400,000 ($150,000) × 1.5% = $2,250
$400,001 to $1,200,000 ($800,000) × 2.0% = $16,000
Toronto MLTT: $20,475
Subtotal: $20,475 + $20,475 = $40,950
Ontario surtax adjustment: +$3,000
Combined total: $43,950
Effective rate: $43,950 ÷ $1,200,000 = 3.66%
At $1.2M the combined land transfer tax exceeds the CMHC insured mortgage threshold ($1M). A buyer at this price needs a minimum 20% down payment ($240,000) and will owe $43,950 in land transfer tax on top of it. With legal fees, title insurance, and home inspection, realistic closing costs reach $50,000+. First-time buyer rebates of $8,475 reduce the LTT portion to $35,475 — the rebate covers just 19% of the tax at this price point.
Worked Example 3: $2,000,000 Home in Toronto
Ontario Land Transfer Tax on $2,000,000:
First $55,000 × 0.5% = $275
$55,001 to $250,000 ($195,000) × 1.0% = $1,950
$250,001 to $400,000 ($150,000) × 1.5% = $2,250
$400,001 to $2,000,000 ($1,600,000) × 2.0% = $32,000
Ontario LTT: $36,475
Toronto Municipal Land Transfer Tax on $2,000,000:
First $55,000 × 0.5% = $275
$55,001 to $250,000 ($195,000) × 1.0% = $1,950
$250,001 to $400,000 ($150,000) × 1.5% = $2,250
$400,001 to $2,000,000 ($1,600,000) × 2.0% = $32,000
Toronto MLTT: $36,475
Subtotal: $36,475 + $36,475 = $72,950
Ontario surtax adjustment: +$3,000
Combined total: $75,950
Effective rate: $75,950 ÷ $2,000,000 = 3.80%
At the $2M price point, the combined land transfer tax approaches $76,000 — more than many Canadians earn in a year. The first-time buyer rebate of $8,475 covers just 11% of the tax. For buyers at this level, the land transfer tax is likely the largest single closing cost, exceeding legal fees, title insurance, and home inspection combined by a factor of ten.
First-Time Buyer Rebate: The $8,475 Ceiling
First-time home buyers in Toronto can claim two separate rebates. The Ontario Land Transfer Tax Refund provides up to $4,000 (covering the full Ontario LTT on homes up to approximately $368,000). The Toronto Municipal Land Transfer Tax Rebate provides up to $4,475 (covering the full Toronto MLTT on homes up to $400,000). Combined maximum: $8,475.
| Purchase Price | Combined LTT | FTB Rebate | Net LTT After Rebate | Rebate Coverage |
|---|---|---|---|---|
| $400,000 | $8,850 | $8,475 | $375 | 96% |
| $500,000 | $12,950 | $8,475 | $4,475 | 65% |
| $800,000 | $25,950 | $8,475 | $17,475 | 33% |
| $1,200,000 | $43,950 | $8,475 | $35,475 | 19% |
| $2,000,000 | $75,950 | $8,475 | $67,475 | 11% |
First-time buyer rebates are fixed maximums. The Ontario refund covers up to $4,000 and the Toronto rebate covers up to $4,475. Both are claimed after closing.
The rebate is meaningful on homes under $500K but becomes increasingly marginal at typical Toronto prices. With the average Toronto home price above $1M in 2025, most first-time buyers will see the rebate cover less than a quarter of their total land transfer tax bill.
Toronto vs. Calgary vs. Ottawa: The Closing Cost Gap
The impact of Toronto's double tax becomes stark when compared to other major Canadian cities. Alberta has no provincial land transfer tax at all. Ottawa, while in Ontario, has no municipal land transfer tax. Here is what the same buyer pays at each price point.
| Price | Toronto (ON + MLTT) | Ottawa (ON only) | Calgary (AB) | Toronto vs. Calgary Delta |
|---|---|---|---|---|
| $800,000 | $25,950 | $12,475 | $0 | +$25,950 |
| $1,200,000 | $43,950 | $20,475 | $0 | +$43,950 |
| $2,000,000 | $75,950 | $36,475 | $0 | +$75,950 |
Calgary figures reflect Alberta's absence of a provincial land transfer tax. Alberta charges a modest land titles registration fee (approximately $50 + $2 per $5,000 of property value), which amounts to roughly $370 on an $800K home — negligible compared to Ontario's land transfer tax.
A buyer choosing a comparable $800K home in Calgary saves $25,950 at closing versus Toronto. That savings alone could cover two years of property taxes in Calgary, or fund a full FHSA contribution plus RRSP top-up. For buyers exploring mortgage qualification at these price points, our mortgage stress test calculator covers the qualification math under the B-20 rules.
How the Combined Effective Rate Climbs With Price
Because both Ontario and Toronto use progressive marginal brackets, the effective (average) rate increases with the purchase price. The combined rate starts modestly but escalates quickly above $400K as both taxes hit their 2.0% brackets simultaneously.
| Purchase Price | Combined LTT | Effective Rate |
|---|---|---|
| $250,000 | $3,725 | 1.49% |
| $400,000 | $8,225 | 2.06% |
| $500,000 | $12,225 | 2.45% |
| $800,000 | $25,950 | 3.24% |
| $1,000,000 | $33,950 | 3.40% |
| $1,200,000 | $43,950 | 3.66% |
| $1,500,000 | $55,950 | 3.73% |
| $2,000,000 | $75,950 | 3.80% |
Effective rate = combined land transfer tax ÷ purchase price. Rates include Ontario surtax adjustments where applicable. All figures assume residential property within City of Toronto boundaries.
The steepest jump in effective rate occurs between $250K and $800K, where the rate more than doubles from 1.49% to 3.24%. Above $800K, the rate continues to climb but more gradually as most of the purchase price is already in the top 2.0% bracket for both taxes.
Cash at Close: The Full Picture for an $800K Purchase
Land transfer tax is not the only closing cost, but it is by far the largest. Here is a realistic closing cost breakdown for an $800K purchase in Toronto with 20% down.
| Item | Amount |
|---|---|
| Down payment (20%) | $160,000 |
| Combined land transfer tax | $25,950 |
| Legal fees and disbursements | ~$2,000 |
| Title insurance | ~$500 |
| Home inspection | ~$500 |
| Property tax / utility adjustments | ~$1,500 |
| Total cash needed at close | ~$190,450 |
Figures are estimates. Legal fees, title insurance, and inspection costs vary. Property tax adjustments depend on closing date and municipal billing cycle.
The land transfer tax represents 86% of closing costs beyond the down payment. For the same $800K home in Ottawa, closing costs beyond the down payment would be approximately $16,975 — $13,475 less than Toronto. For Ontario income tax context relevant to affording these costs, our Ontario income tax take-home calculator shows exact after-tax pay at common salary levels.
Strategies to Reduce the Land Transfer Tax Burden
1. Claim both first-time buyer rebates
• Ontario: up to $4,000
• Toronto: up to $4,475
• Combined max: $8,475
• Must be first home anywhere in the world
2. Buy just outside Toronto city limits
• Mississauga, Markham, Vaughan, Brampton — Ontario LTT only
• $800K home: $12,475 instead of $25,950 (saves $13,475)
• No municipal land transfer tax in any other Ontario city
3. Use FHSA and RRSP Home Buyers' Plan together
• FHSA: withdraw up to $40,000 tax-free for first home
• HBP: borrow up to $60,000 from RRSP (must repay over 15 years)
• Combined $100,000 tax-advantaged to help cover down payment + LTT
4. Negotiate closing date for rebate timing
• FTB rebates are claimed after closing, not at closing
• You need the full LTT amount in cash on closing day
• Budget for the gross amount, then receive the rebate as a refund
The most impactful strategy by far is buying outside Toronto city limits. A home in Mississauga or Vaughan eliminates the entire Toronto municipal tax — saving $12,475 on an $800K purchase and $36,475 on a $2M purchase. For first-time buyers considering the FHSA route, our FHSA vs. RRSP Home Buyers' Plan comparison covers which account saves more tax on a first home purchase.
Important Disclaimer
This article provides general information about Ontario and Toronto land transfer taxes as of 2025. Tax rates and first-time buyer rebate amounts are based on current published schedules from the Ontario Ministry of Finance and the City of Toronto. Rates may change through legislation or bylaw amendments. The calculations shown are for standard residential property purchases and may not apply to commercial property, vacant land, or transfers between related parties. Surtax calculations on properties over $400,000 follow Ontario's prescribed formula for single-family residences. This is not financial, legal, or tax advice. Consult a real estate lawyer for guidance specific to your transaction.