Ontario Real Estate Glossary

Land Transfer Tax (Ontario)

A provincial tax payable by the buyer on the closing of any Ontario real estate purchase, calculated as a marginal rate on the purchase price. Toronto purchases also pay a separate Municipal Land Transfer Tax with similar brackets.

What is Ontario Land Transfer Tax?

Land Transfer Tax (LTT) is a one-time provincial tax the buyer pays on closing when registering the transfer of an Ontario property. The tax uses marginal brackets, so each portion of the purchase price is taxed at its own rate. Property in the City of Toronto pays the provincial LTT plus a separate Municipal Land Transfer Tax (MLTT) with comparable brackets — effectively doubling the closing tax on a Toronto purchase. First-time buyers receive a partial rebate up to a fixed cap.

Provincial LTT brackets (current)

Portion of the price	Marginal rate
Up to $55,000	0.5%
$55,000.01 to $250,000	1.0%
$250,000.01 to $400,000	1.5%
$400,000.01 to $2,000,000	2.0%
Above $2,000,000	2.5% (single-family residential)

The 2.5% rate applies only to the residential portion of the price above $2 million. Commercial and multi-residential properties are capped at 2.0% on the highest bracket.

Toronto MLTT brackets (current)

Toronto's Municipal Land Transfer Tax mirrors the provincial structure with its own bracket schedule. The combined effect on a Toronto purchase is roughly double the LTT a buyer would pay on the same price elsewhere in Ontario.

Portion of the price	Marginal MLTT rate
Up to $55,000	0.5%
$55,000.01 to $250,000	1.0%
$250,000.01 to $400,000	1.5%
$400,000.01 to $2,000,000	2.0%
$2,000,000.01 to $3,000,000	2.5%
$3,000,000.01 to $4,000,000	3.5%
$4,000,000.01 to $5,000,000	4.5%
$5,000,000.01 to $10,000,000	5.5%
$10,000,000.01 to $20,000,000	6.5%
Above $20,000,000	7.5%

The high-end Toronto brackets above $3 million were introduced in January 2024 and are routinely tested in current continuing-education updates.

A worked example

Purchase price: $800,000 outside Toronto.

$55,000 × 0.5% = $275
($250,000 − $55,000) × 1.0% = $1,950
($400,000 − $250,000) × 1.5% = $2,250
($800,000 − $400,000) × 2.0% = $8,000
Total provincial LTT = $12,475

Same purchase in Toronto: provincial $12,475 + Toronto MLTT $12,475 = $24,950 in combined LTT before any rebate.

First-time homebuyer rebate

Eligible first-time buyers receive a refund of up to $4,000 of provincial LTT (effectively waiving LTT on the first $368,000 of the purchase price). Toronto offers a separate first-time MLTT rebate of up to $4,475. Both rebates require the buyer to:

Be 18 or older
Have never owned a home anywhere in the world
Have a spouse who has never owned a home during the marriage
Move into the home as their principal residence within 9 months

The exam tests both the dollar caps and the eligibility tests.

Where this appears in your Humber program

Land Transfer Tax calculations are core math content in Course 2: Residential Transactions and reappear in Course 4: Commercial Real Estate for commercial closings (where the residential first-time-buyer rebate does not apply). LTT math is a near-guaranteed exam topic, and questions usually test marginal-rate understanding rather than memorized totals.

Practical guidance for registrants

Calculate LTT on every offer and quote it to the buyer in writing as part of estimated closing costs. Surprise LTT bills are one of the top sources of pre-closing buyer anxiety.
For Toronto purchases, always quote provincial + MLTT together. Quoting only the provincial figure is a common new-registrant mistake.
Confirm first-time buyer eligibility carefully before promising the rebate. The "spouse has never owned" rule trips up buyers in second marriages.

Frequently asked questions

How much is land transfer tax in Ontario?

Ontario Land Transfer Tax uses marginal brackets: 0.5% on the first $55,000, 1.0% on $55,001-$250,000, 1.5% on $250,001-$400,000, 2.0% on $400,001-$2,000,000, and 2.5% on the residential portion above $2,000,000. A $700,000 freehold purchase outside Toronto pays about $10,475 in provincial LTT. Toronto purchases pay an equivalent Municipal Land Transfer Tax on top, roughly doubling the LTT bill.

Who pays land transfer tax in Ontario, the buyer or seller?

The buyer pays land transfer tax in Ontario, never the seller. The buyer's lawyer arranges payment as part of the closing, with funds typically transferred from the lawyer's trust account when title is registered. Sellers do not pay LTT on their own sales (though they will pay LTT on their next purchase). The buyer's responsibility for LTT is universal across Canadian provinces that levy this tax.

How can I avoid land transfer tax in Ontario?

You generally cannot avoid Ontario LTT on an arm's-length purchase. The most common legitimate reductions are: the first-time homebuyer rebate (up to $4,000 provincial + $4,475 in Toronto for eligible buyers), transfers between spouses (exempt under specific conditions), and inheritances under a will (no LTT payable). Selling a home to a family member at below-market value still triggers LTT on the fair market value, not the price paid — selling to your child for $1 does not avoid the tax.

How much is Toronto land transfer tax for a $1,000,000 home?

A $1,000,000 home in Toronto pays both provincial LTT (approximately $16,475) and municipal Toronto LTT (approximately $16,475), for a combined total of roughly $32,950. First-time-buyer rebates can reduce both portions if the buyer qualifies (up to $4,000 provincial and $4,475 Toronto). Toronto LTT brackets above $3 million have been higher since January 2024 (escalating to 7.5% above $20 million).

Practice this topic

ExamAce includes LTT calculation drills with marginal-rate worked examples in the Course 2 question bank and Toronto MLTT scenarios in the simulation banks.

See it in practice

Walk through a realistic Ontario scenario where Land Transfer Tax (Ontario) matters — with the decision point, the correct move, and the pitfall.