A tax paid by the buyer when a property changes hands in Ontario. The provincial land transfer tax is calculated on a tiered scale based on the purchase price. Buyers in Toronto pay an additional municipal land transfer tax on top of the provincial one. First-time buyers may qualify for rebates on both.
Why It Matters
Land transfer tax is one of the largest closing costs, and in Toronto, paying both provincial and municipal taxes can add up to tens of thousands of dollars. Budget for it early -- it's due on closing day, and it's not optional. First-time buyer rebates can help, but they don't cover everything.
Real-World Example
You buy a condo in downtown Toronto for $700,000. Your provincial land transfer tax is $11,475 (calculated on a tiered scale). On top of that, you owe the Toronto municipal land transfer tax of $11,475. Your total land transfer tax bill is $22,950, due on closing day. As a first-time buyer, you receive a provincial rebate of up to $4,000 and a Toronto rebate of up to $4,475, reducing your net cost to $14,475.
Ontario & GTA Context
Ontario's provincial land transfer tax uses tiered rates: 0.5% on the first $55,000, 1% on $55,001 to $250,000, 1.5% on $250,001 to $400,000, 2% on $400,001 to $2,000,000, and 2.5% above $2,000,000. Toronto is the only municipality in Ontario that levies an additional municipal land transfer tax at similar rates. First-time buyer rebates are available for both the provincial and Toronto taxes, with separate eligibility criteria for each.
How It Works in Practice
Use a land transfer tax calculator to estimate your total cost early in the buying process. Factor this amount into your closing costs budget -- it is not covered by your mortgage. If you qualify as a first-time buyer, your lawyer will apply for the rebates on your behalf at closing.
Common Questions
How much is the first-time buyer land transfer tax rebate in Ontario?▾
Do I pay land transfer tax on a condo in Ontario?▾
When is the land transfer tax due?▾
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