If you are buying a home in Ontario, Land Transfer Tax (LTT) is almost certainly the biggest single line item on your closing statement. Bigger than legal fees, title insurance, or any disbursement. Here is how it actually works.
How Provincial LTT Is Calculated
Ontario uses a marginal rate system, much like federal income tax. The tax climbs in brackets as the purchase price climbs:
- 0.5% on the first $55,000
- 1.0% on the portion between $55,000 and $250,000
- 1.5% on the portion between $250,000 and $400,000
- 2.0% on the portion between $400,000 and $2,000,000
- 2.5% on any portion over $2,000,000
A $700,000 home in Windsor, for example, attracts roughly $10,475 in provincial LTT before any rebate.
If You Are Buying in Toronto
Properties inside the City of Toronto boundary pay a second tax. The Municipal Land Transfer Tax (MLTT). On top of the provincial one. The bracket structure mirrors the provincial rates, which effectively doubles your tax bill at closing compared to anywhere else in Ontario.
That same $700,000 home. If it were in Toronto rather than Windsor. Would attract roughly $20,950 in combined LTT.
First-Time Buyer Rebates
If you qualify as a first-time buyer, you can claim:
- Up to $4,000 in provincial Land Transfer Tax rebate
- An additional up to $4,475 in Toronto MLTT rebate (Toronto purchases only)
To qualify, you must be:
- At least 18 years old
- A Canadian citizen or permanent resident
- A genuine first-time buyer. Never owned property anywhere in the world
- Not married to someone who owned property while you were spouses
- Moving in within nine months of closing
The rebate is applied at closing through the registration, so you do not pay upfront and claim later. Your lawyer credits it directly against the tax owed.
How to Plan
Two practical tips:
- Run the numbers before you write an offer. Use our free Land Transfer Tax calculator to get a number you can actually budget for.
- Confirm rebate eligibility early. A surprising number of buyers don't realize the world-wide ownership rule disqualifies them. Even owning property abroad as a young adult can disqualify you decades later.
If you want a full closing-cost estimate (not just LTT), get a free quote. The quote we send breaks every line out.