Land transfer tax토지양도세 (LTT)

What is it?

Land transfer tax is a provincial tax paid by the buyer (the "transferee") whenever ownership of a home or land in Ontario changes hands. The seller does not pay it. Readers from Korea can think of it like Korea’s acquisition tax (취득세), which is also paid by the buyer.

Your lawyer pays it on closing (the day you pay the balance and the home becomes yours), at the same time as the transfer is registered. The transfer cannot be registered until the tax is paid, so you need this money ready before closing, on top of your down payment.

The tax is based on the "value of the consideration". Usually that is the purchase price, but it also includes any mortgage you take over and any other benefit you give. The size of your own mortgage does not matter: the tax is on the whole price.

What are the rates?

For transfers registered on or after January 1, 2017 (with an agreement signed after November 14, 2016), these brackets apply. You do not multiply the whole price by one rate. Each bracket is taxed separately and the pieces are added up.

The 2.5% bracket applies only to land with one or two single family residences. A condo unit counts as a single family residence under the Act. An apartment building or a store stays at 2.0% even above $2,000,000.

Step by step

Take a home that costs $800,000.

1. $55,000 × 0.5% = $275
2. The part over $55,000 up to $250,000 (= $195,000) × 1.0% = $1,950
3. The part over $250,000 up to $400,000 (= $150,000) × 1.5% = $2,250
4. The part over $400,000 up to $800,000 (= $400,000) × 2.0% = $8,000
5. Add them up: $275 + $1,950 + $2,250 + $8,000 = $12,475

Quick formula: for a price over $400,000 and up to $2,000,000, the tax is "price × 2% − $3,525". ($800,000 × 0.02 − $3,525 = $12,475)

Worked examples

For reference only. These are before the first-time buyer refund (up to $4,000) and the Toronto rebate (up to $4,475). Toronto rates are as of April 1, 2026, and the city rate is higher above $3,000,000.

Inside the City of Toronto you pay twice

A home inside the City of Toronto (including North York, Scarborough and Etobicoke) pays the Toronto municipal land transfer tax (MLTT) on top of the Ontario tax. Up to $2,000,000 the city rates are the same as the provincial rates, so the tax roughly doubles.

Vaughan, Markham, Richmond Hill, Mississauga and the other cities outside Toronto have no municipal land transfer tax. If a home is close to the Toronto border, check which city the address is in, not just the neighbourhood name.

First-time buyers get money back

If you have never owned a home, you can get back up to $4,000 of the Ontario tax. This is the limit for transfers on or after January 1, 2017. On a price up to $368,000 the whole tax is refunded; above that, you get $4,000.

You must be at least 18, a Canadian citizen or permanent resident, never have owned a home anywhere in the world, and your spouse must not have owned one while they were your spouse. You must also move in as your principal residence within nine months of closing. Your lawyer usually applies the refund on closing so it comes straight off the tax. See "First-time buyer land transfer tax refund" for the details.

When no tax is payable

• Transfers between spouses (including common-law spouses): a regulation (R.R.O. 1990, Reg. 696) exempts only three situations: (1) the only thing taken over is a registered mortgage or other charge, (2) the transfer follows a written separation agreement, or (3) it follows a court order or judgment.
• A pure gift: if no money, no mortgage and no other benefit changes hands and the land is given for "natural love and affection" only, the value of the consideration is nil, so the tax is nil. But if a mortgage is still on the home, the balance counts as consideration and tax applies.
• When the Crown (the government) is the only transferee, and some farm and other transfers set out in the Act and regulations.
• A sale between family members who are not spouses (parent and child, for example) is taxed like any other sale. Only a gift with no consideration at all is different. Every case is different, so ask a lawyer.

New homes, pre-construction and foreign buyers

When you buy a new home from a builder, upgrades and "soft costs" are part of the value of the consideration. HST charged on the price is left out of the land transfer tax calculation. If the contract is in a foreign currency, it is converted to Canadian dollars at the rate on the day the agreement became binding.

If a buyer is not a Canadian citizen or permanent resident (or is a foreign corporation or taxable trustee), the Non-Resident Speculation Tax (NRST) of 25% of the price is added on top of land transfer tax.

Example