First-time home buyers purchasing in the City of Toronto can claim up to $8,475 in combined land transfer tax rebates. The Ontario provincial rebate covers up to $4,000, and the Toronto municipal land transfer tax rebate covers up to $4,475. These two rebates are separate programs with similar but not identical rules, and both can be claimed on the same purchase.
The provincial land transfer tax rebate eliminates all Ontario LTT on homes priced at $368,000 or less. For homes above that price, the buyer still receives the full $4,000 and pays the remaining balance. To qualify, you must be a Canadian citizen or permanent resident, at least 18 years old, and you must occupy the home as your principal residence within nine months of closing. You cannot have owned a home or any interest in a home, anywhere in the world, at any time. Your spouse also cannot have owned a home while they were your spouse.
Toronto's municipal land transfer tax rebate works alongside the provincial one. It covers the full MLTT on homes up to $400,000, with a maximum rebate of $4,475. The eligibility criteria largely mirror the provincial requirements. One notable difference is that Toronto allows buyers who are not yet Canadian citizens or permanent residents at closing to apply for the rebate if they obtain that status within 18 months of the transfer date.
The spouse rule trips up more buyers than any other requirement. Under both programs, if your current spouse owned property at any point while they were your spouse, neither of you qualifies for the full rebate. If one buyer on title is eligible and the other is not, the rebate is reduced proportionally based on each person's ownership interest.
Your real estate lawyer typically claims both rebates at the time of registration through Ontario's electronic land registration system. If the rebates are not claimed at that point, the full tax must be paid upfront. You then have 18 months from the date of transfer to apply for a refund from the Ministry of Finance for the provincial portion, and separately from the City of Toronto for the municipal portion.
These rebates apply to all types of residential property, including condos, townhouses, semi-detached, and detached homes. They are available on both new construction and resale purchases. Learn more about how closing costs add up for Toronto buyers.
