Land Transfer Tax (LTT) is a provincial tax paid by the buyer on the purchase of any property in Ontario. It is one of the largest closing costs and one that catches many first-time buyers off guard - particularly in Toronto, where an additional municipal tax applies on top of the provincial one. Understanding how it works, and what rebates you may qualify for, is an important part of budgeting your purchase.
Ontario provincial LTT brackets
The provincial tax is calculated in tiers based on the purchase price. The brackets and rates are:
- On the first $55,000: 0.5%
- $55,001 to $250,000: 1.0%
- $250,001 to $400,000: 1.5%
- $400,001 to $2,000,000: 2.0%
- Over $2,000,000: 2.5%
For example, the Ontario LTT on an $800,000 purchase works out to $12,475.
Toronto Municipal Land Transfer Tax
If you are buying a property within the City of Toronto boundaries, you pay a second land transfer tax - the Toronto Municipal LTT - on top of the provincial amount. The Toronto tax uses the same bracket structure, meaning the two taxes combined roughly double your LTT obligation for Toronto purchases.
On the same $800,000 purchase within Toronto, the combined provincial and municipal LTT is $24,950. This is a significant closing cost that must be paid on closing day.
First-time buyer rebates
First-time buyers are eligible for rebates that can meaningfully reduce this amount:
- Ontario First-Time Homebuyer Rebate: up to $4,000 against provincial LTT
- Toronto First-Time Homebuyer Rebate: up to $4,475 against Toronto municipal LTT (for Toronto purchases only)
A first-time buyer purchasing an $800,000 home in Toronto would reduce their combined $24,950 LTT by $8,475 - paying $16,475 net. Outside Toronto, the same buyer would pay $8,475 ($12,475 minus the $4,000 rebate).
To qualify, you must never have owned a home anywhere in the world. If you are purchasing with a spouse or partner who has previously owned, the rebate may be reduced or unavailable - your lawyer will confirm your specific eligibility.
When and how LTT is paid
Land transfer tax is not paid upfront when you make an offer. It is collected on closing day by your real estate lawyer as part of the overall closing funds. Your lawyer will calculate the exact amount owed and include it in the statement of adjustments they prepare before closing.
Plan for it early
The most important thing to understand is that LTT is in addition to your down payment and other closing costs. Budget for it explicitly - do not assume it is somehow included in anything else. For a $700,000–$900,000 purchase in the GTA, you should expect to set aside $10,000–$20,000 for LTT alone (less if you qualify for first-time buyer rebates).
Use our free LTT calculator to get a precise estimate for your specific purchase price and situation. And if you have questions about how LTT fits into your overall buying budget, reach out to us - we walk through this with every buyer we work with.
