Ontario land transfer tax is a provincial tax calculated on a marginal basis against the purchase price of the property, paid by the buyer on closing day. Buyers purchasing within the City of Toronto pay an additional municipal land transfer tax on top of the provincial tax, which can effectively double the total amount owed.
The Ontario land transfer tax is a marginal tax, and each portion of your home's value is taxed at a unique rate.
The provincial land transfer tax is calculated on a marginal basis: 0.5% on the first $55,000, 1% on amounts from $55,001 to $250,000, 1.5% from $250,001 to $400,000, and 2% on amounts over $400,000.
The rate tops out at 2.5% for values more than $2 million if the land contains no more than two single-family residences. This tiered structure means you do not pay the highest rate on the full purchase price. Instead, each slice of the price is taxed at its corresponding rate, similar to how income tax brackets work.
Toronto is the only municipality in Ontario that charges a municipal land transfer tax in addition to the provincial tax. If you are purchasing a property within the City of Toronto boundaries, you pay both taxes, effectively doubling your land transfer tax bill.
The Toronto MLTT uses the same bracket structure as the provincial tax for properties up to $3,000,000.
On December 17, 2025 City Council passed an amendment to introduce graduated Municipal Land Transfer Tax rates for high-value residential properties containing one or two single-family residences, with new MLTT rates taking effect on April 1, 2026.
To illustrate how the math works, consider a $500,000 purchase. The combined Ontario and Toronto land transfer tax on a $500,000 property would total $12,950.
The municipal tax only applies to properties located within the City of Toronto's official boundaries and does not apply to surrounding municipalities in the Greater Toronto Area such as Mississauga, Markham, Vaughan, or Brampton.
Land transfer tax cannot be added into your mortgage and must be paid as soon as you take possession of the property from the seller on closing day. Your real estate lawyer handles the payment and registration as part of closing. Land transfer tax in Ontario is not tax-deductible and cannot be claimed on your personal income tax return because it is considered a closing cost, not an income tax or deductible expense. First-time home buyers may be eligible for rebates that reduce the total amount owed. For more on those programs, see our related article.
