Understanding the Ontario Land Transfer Tax

by Cathy Tse

Understanding the Ontario Land Transfer Tax

Buying real estate in Ontario is exciting but it also comes with a variety of costs you will want to budget for. One of the most significant of those is the Ontario Land Transfer Tax (LTT).

What is Land Transfer Tax?

Whenever ownership of real property changes hands in Ontario, the province imposes a tax on the “consideration” (purchase price and certain assumed liabilities). That’s the LTT.

In simpler terms: if you are buying, you are generally paying LTT in addition to other costs. The tax needs to be paid at closing or when the ownership is registered.

How is LTT Calculated?

The LTT is marginal, that is different portions of the purchase price are taxed at different rates. Below are the basic provincial rates in Ontario:

Portion of Purchase Price	Marginal Tax Rate
First $55,000	0.5%
>$55,000 to $250,000	1%
>$250,000 to $400,000	1.5%
>$400,000 and above	2%
Over $2,000,000	2.5%

*If you are buying within the City of Toronto, you will likely also pay the municipal land transfer tax in addition to the provincial LTT.

Calculate your LTT here: Land Transfer Tax Calculator

Who Pays the LTT?

In Ontario, the buyer pays the LTT when acquiring land or a beneficial interest in land. The seller typically does not pay this tax, unless there is a special arrangement in the contract.

Rebates & Exemptions

Here are some of the most common relief programs:

The Ontario first-time homebuyer rebate: qualified first-time buyers can receive a rebate of up to $4,000 on the provincial LTT.
Certain transfers between spouses, or to family-run farming corporations, may qualify for reduced or no LTT under specific conditions.
If you buy in Toronto, there is also a municipal rebate for first-time purchasers.

Final Thoughts

LTT might feel like a hidden cost when you first look at purchasing, but it is one of the key closing expenses that smart buyers anticipate and plan for. Understanding the tax structure and calculation, checking your eligibility for rebates or exemptions give you stronger control and peace of mind.

If you are thinking of buying, selling, investing or renting, and want help with budgeting, strategy, or simply understanding all the closing costs, I am here to walk you through it.

Cathy | Real Estate Agent

Direct: 647-463-8810 | Email: cathy.tse@century21.ca
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