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.
Common questions
How much is land transfer tax on a $700,000 home in Ontario?
Roughly $10,475 in provincial Land Transfer Tax, before any rebate. Ontario uses marginal brackets, so the rate climbs with the price: 0.5% on the first $55,000 up to 2.5% on any portion over $2,000,000. If the home is inside the City of Toronto, a municipal tax roughly doubles that to about $20,950.
Do first-time home buyers pay land transfer tax in Ontario?
Usually yes, but less than everyone else. Qualifying first-time buyers can claim up to $4,000 back on the provincial tax, plus up to an extra $4,475 on Toronto's municipal tax for purchases inside Toronto. The main conditions: you must be at least 18, a Canadian citizen or permanent resident, and never have owned property anywhere in the world.
Do I pay Toronto land transfer tax if I buy outside the city?
No. The Municipal Land Transfer Tax applies only to properties inside the City of Toronto boundary. Buy anywhere else in Ontario, including Windsor, and you pay just the provincial tax. Inside Toronto, the municipal brackets mirror the provincial ones, which effectively doubles the total tax bill at closing.
Do I pay the land transfer tax upfront and claim the first-time buyer rebate later?
No. The rebate is applied at closing through the registration itself. Your lawyer credits it directly against the tax owed, so you only pay the difference on closing day. There is no separate claim to file afterward, but confirm your eligibility early, because the rules are stricter than most buyers expect.
Can I get the first-time buyer rebate if I owned property in another country?
No. The rebate requires that you have never owned property anywhere in the world, not just in Canada. Even a property you owned abroad as a young adult can disqualify you decades later. You are also disqualified if your spouse owned property while you were married to each other.
About the author: Christian Janisse is a licensed Ontario real estate lawyer and the founder of Simplyclose Law Professional Corporation. He acts for buyers, sellers, and lenders on purchases, sales, refinances, and title transfers across Ontario — in person in Windsor and remotely province-wide.