In Ontario, the buyer pays land transfer tax. The seller owes none of it. The tax is charged to whoever acquires the property, and it becomes payable when the deal closes and the transfer is registered.
The rule comes from Ontario's Land Transfer Tax Act, administered by the Ministry of Finance. Tax is calculated on the value of the consideration, which for most residential deals means the purchase price plus any mortgage or debt the buyer takes over. The provincial rate is graduated: 0.5 per cent on the first $55,000, 1 per cent to $250,000, 1.5 per cent to $400,000, 2 per cent to $2 million, and 2.5 per cent above that on most homes. Buy inside the City of Toronto and a second, municipal land transfer tax applies on top of the provincial one, which is why a Toronto purchase carries two bills where a Mississauga purchase carries one. Running the numbers on a specific price is usually the fastest way to see what that adds up to.
Mechanically, the buyer's real estate lawyer collects the tax along with the balance of the purchase price and remits it at registration. It never appears as a charge against the seller on the statement of adjustments. Buyers who have never owned a home anywhere can claim a refund of up to $4,000 from the province and up to $4,475 from the City of Toronto, either at registration through their lawyer or by applying afterward. Those first-time buyer rebates reduce what is owed but do not shift the obligation onto anyone else.
So what does a seller actually pay? Real estate commission and the HST charged on it, legal fees, a discharge fee on the existing mortgage, and a prepayment penalty if the mortgage is broken early rather than ported. Property tax already paid past the closing date gets credited back. None of that is land transfer tax.
One wrinkle causes recurring confusion. When the seller is a non-resident of Canada, the buyer's lawyer typically holds back a portion of the sale proceeds until a clearance certificate arrives from the Canada Revenue Agency. That holdback relates to income tax on the seller's gain and has nothing to do with land transfer tax, which the buyer still pays in full.
Sellers who are also buying their next place will pay the tax on that side of the move, and it is worth budgeting for early.
Related reading: How Is Ontario Land Transfer Tax Calculated in Toronto?, How Much Does It Cost to Sell a House in Toronto?, and How Much Are Closing Costs When Buying a Home in Toronto?
