Of all the costs of buying a home in Ontario, land transfer tax is the one that surprises people most. It isn't in the listing price, it can't usually go on the mortgage, and on an ordinary Toronto house it runs to tens of thousands of dollars, paid in cash on closing day.
The good news is that the arithmetic is simpler than it looks. This walks through how the provincial tax is worked out, what Toronto adds on top (including the tiers that changed on 1 April 2026), what first-time buyers get back, and when the money is actually due. Every figure comes from our land transfer tax calculator, which uses the rates published by Ontario and the City of Toronto.
How the Ontario tax works
Ontario charges land transfer tax in brackets, the way income tax works. The price is cut into slices and each slice is taxed at its own rate. For a home with one or two single-family residences, which covers most houses and condos, the brackets have been the same since 1 January 2017:
| Part of the price | Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 to $250,000 | 1% |
| $250,000 to $400,000 | 1.5% |
| $400,000 to $2 million | 2% |
| Over $2 million | 2.5% |
Take a $900,000 home. The first $55,000 is taxed at 0.5%, which is $275. The next $195,000 at 1% is $1,950. The next $150,000 at 1.5% is $2,250. The last $500,000 at 2% is $10,000. Add them up and the estimated tax is $14,475.
Because each rate only touches its own slice, the effective rate is always lower than the top rate you reach. On $900,000 it works out to about 1.6%, not 2%.
There's a shortcut, too. For any price between $400,000 and $2 million, the Ontario tax is 2% of the price less $3,525. On $900,000 that's $18,000 less $3,525, the same $14,475.
Toronto charges it twice
If the home is in the City of Toronto, there's a second tax: the municipal land transfer tax. Up to $3 million it uses exactly the same brackets as the province, so for most Toronto purchases the total is simply double the Ontario figure. That same $900,000 home costs an estimated $28,950 in land transfer tax in Toronto, against $14,475 in Hamilton or Ottawa.
Other GTA cities, Mississauga, Vaughan and Markham among them, don't have a municipal land transfer tax. Crossing Steeles changes the closing costs noticeably.
Here's how it looks at a few prices, before any first-time buyer refund:
| Price | Ontario only | In Toronto (both taxes) |
|---|---|---|
| $500,000 | $6,475 | $12,950 |
| $750,000 | $11,475 | $22,950 |
| $1,000,000 | $16,475 | $32,950 |
| $1,500,000 | $26,475 | $52,950 |
| $2,500,000 | $48,975 | $97,950 |
What changed in Toronto on 1 April 2026
Toronto first added higher tiers above $3 million at the start of 2024. For transfers registered from 1 April 2026, those tiers went up:
| Part of the price | 2024 to March 2026 | From 1 April 2026 |
|---|---|---|
| $3 million to $4 million | 3.5% | 4.4% |
| $4 million to $5 million | 4.5% | 5.45% |
| $5 million to $10 million | 5.5% | 6.5% |
| $10 million to $20 million | 6.5% | 7.55% |
| Over $20 million | 7.5% | 8.6% |
Prices of $3 million or less weren't affected. Above that the change is real but narrower than the headline rates suggest, because only the slice above $3 million is touched. On a $3.5 million home, Toronto's portion goes from an estimated $78,975 to $83,475, which is $4,500 more. Add the provincial $73,975 and the total comes to about $157,450. On a $4.5 million home the municipal tax rises from about $118,975 to $132,725.
One detail matters if a deal straddled the change: the date of closing decides which rates apply, not the date the agreement was signed. The calculator can show the earlier tiers for a closing before 1 April 2026.
First-time buyer refunds
Ontario refunds up to $4,000 of the provincial tax to first-time buyers, and Toronto rebates up to $4,475 of its municipal tax. Neither has a price cap. In practice the Ontario refund covers the whole provincial tax on a home up to about $368,000, and Toronto's covers the whole municipal tax up to $400,000. Above those prices, the refund is a fixed amount off a larger bill.
Take Jordan, buying a first condo for $650,000. In Toronto, the two taxes come to an estimated $18,950. The refunds take off $8,475, leaving about $10,475. The same condo in Mississauga would carry only the provincial tax, $9,475, and after the $4,000 refund Jordan would pay about $5,475.
| First-time buyer, after refunds | Ontario only | In Toronto |
|---|---|---|
| $500,000 | $2,475 | $4,475 |
| $750,000 | $7,475 | $14,475 |
| $1,000,000 | $12,475 | $24,475 |
Broadly, to qualify you need to be at least 18, a Canadian citizen or permanent resident, and to move in as your principal residence within nine months. You can't have owned a home, or an interest in one, anywhere in the world, and neither can your spouse while you've been together. Where one buyer qualifies and another doesn't, the refund is usually reduced in proportion to their share. The rules have more detail than that, and you may wish to confirm your own situation with your lawyer.
When it's paid
Land transfer tax is paid on closing day, through your real estate lawyer, when the transfer is registered. In Toronto both taxes are paid at the same time. First-time buyer refunds are normally claimed then as well, so the refund comes off the amount paid rather than arriving later; if it isn't claimed at registration, there's an 18-month window to apply.
Lenders don't generally let you add the tax to the mortgage. It comes out of your cash alongside the down payment and legal fees, which is why it's worth knowing early. A buyer who has saved exactly 20% of the price and forgotten the land transfer tax can find the down payment falls short on paper.
Running your own figure
The land transfer tax calculator shows the tax slice by slice, with Toronto side by side and the refunds applied if they fit your situation. If you're selling one home to buy another, the move-up calculator uses the same engine and takes the tax out of your sale proceeds before working out the down payment. Both are on the calculators page.
The calculator covers residential property with one or two single-family residences. It doesn't include the non-resident speculation tax, or the rules for commercial, multi-unit or farm property. Your real estate lawyer calculates and confirms the actual figure at closing.
Jordan is an illustrative example. Rates were reviewed on 28 September 2026 against ontario.ca and toronto.ca, and all figures are estimates for residential property containing one or two single-family residences. This is general information, not tax or legal advice, and nothing here is a recommendation.