Yes. You pay land transfer tax on a pre-construction condo in Toronto, but not when you sign the agreement and not when you move in. The tax comes due at final closing, the day title is registered in your name, which can be years after your purchase date.
A pre-construction purchase has two closings. The first is interim occupancy, when the building is finished enough for the city to allow people to live in it but the condominium corporation is not yet registered. During that stretch you have possession without ownership, and you pay interim occupancy fees to the builder rather than a mortgage payment. Title has not moved, so no land transfer tax applies. Final closing happens after the corporation is registered. Your lawyer registers the transfer, your mortgage funds, and the tax is collected as part of that transaction.
Toronto buyers pay it twice. Ontario charges a provincial land transfer tax on a graduated scale, and the City of Toronto charges a municipal land transfer tax on top using brackets that mirror the provincial ones up to $3 million. On a $700,000 unit that comes to about $10,475 provincially and roughly the same again municipally, close to $20,950 before any rebate. Our explanation of how Ontario land transfer tax is calculated sets out the brackets.
What surprises pre-construction buyers is the figure the tax is applied to. Ontario does not use the bare purchase price. The value of consideration takes in upgrades and extras bought from the builder, floor or lot premiums, and any development charges and levies your agreement makes you responsible for. HST on the price itself is excluded. Add thirty thousand dollars of finishes and a few thousand in charges, and the tax bill moves with them.
First-time buyers recover part of it. Ontario refunds up to $4,000 and Toronto rebates up to $4,475, a combined maximum of $8,475 claimed by your lawyer at registration rather than applied for later. Eligibility is tested at closing, not at signing, which matters when a purchase takes four years to complete. Anyone who has owned a home anywhere in the world in the meantime loses the refund.
Related reading: How Do Pre-Construction Condo Deposits Work in Toronto?, Land Transfer Tax Rebates for First-Time Buyers in Toronto, and What Is the Difference Between a Pre-Construction and Resale Condo in Toronto?