Ontario charges land transfer tax on almost every home purchase, and it is due in full on closing day. It cannot be added to your mortgage. Here is the published formula, what first-time buyers get back, and what it looks like on a real purchase price.
The provincial brackets
Ontario’s land transfer tax is marginal, like income tax. Each slice of the purchase price is taxed at its own rate:
- 0.5% on the first $55,000
- 1% on the portion from $55,000.01 to $250,000
- 1.5% on the portion from $250,000.01 to $400,000
- 2% on the portion from $400,000.01 to $2,000,000
- 2.5% on the portion above $2,000,000, for properties with one or two single-family residences
The rates apply to the value of the consideration — in a standard resale purchase, that is the price on your agreement of purchase and sale.
A worked example at $700,000
This is a hypothetical example at a round number, not a market statistic. On a $700,000 purchase:
| Bracket | Rate | Tax |
|---|---|---|
| First $55,000 | 0.5% | $275 |
| $55,000.01 – $250,000 | 1% | $1,950 |
| $250,000.01 – $400,000 | 1.5% | $2,250 |
| $400,000.01 – $700,000 | 2% | $6,000 |
| Total | $10,475 |
The tax is payable when the deed is registered. Your real estate lawyer collects it as part of your closing funds and remits it to the province.
The first-time buyer refund: up to $4,000
Qualifying first-time buyers can claim a refund of up to $4,000. Since the refund covers the full tax on the first $368,000 of purchase price, a first-time buyer purchasing at or below that level pays no provincial land transfer tax at all.
To qualify, you must be at least 18, you must never have owned a home or an interest in a home anywhere in the world, and your spouse must not have owned one while they were your spouse. Your lawyer typically claims the refund at registration so it nets against the tax owing — you never write the cheque. If it is missed at closing, you have 18 months to apply to the Ministry of Finance.
In the $700,000 example above, a qualifying first-time buyer would pay $10,475 minus $4,000, or $6,475.
No municipal land transfer tax in KWCG
Toronto charges a second, municipal land transfer tax on top of the provincial one. That tax stops at Toronto’s city limits. Buyers in Kitchener, Waterloo, Cambridge, Guelph, and the surrounding townships pay the provincial tax once and nothing more. On the same purchase price, that is a meaningful closing-cost difference between buying in Toronto and buying in Waterloo Region or Guelph.
When land transfer tax works differently
A few situations change the calculation. Purchases of new homes from a builder may calculate the tax on a price that includes or excludes HST depending on how the agreement is structured — your lawyer confirms the taxable consideration. Certain transfers between spouses and some family farm transfers can be exempt. Non-resident buyers may also owe Ontario’s non-resident speculation tax, which is a separate tax with its own rules. None of these replace the standard formula for a typical resale purchase; they sit alongside it.
Budget for it as cash on closing
Land transfer tax is usually the largest single closing cost after your down payment, and lenders do not finance it. Run the formula on your target price range before you offer, and confirm the exact figure with your lawyer once you have a firm deal.
Wondering what your current home would sell for before you buy the next one? Start at /home-value/. Estimates are ranges. A licensed District agent delivers the real number within 24 hours.