How is Ontario land transfer tax calculated on a home purchase?

Ontario land transfer tax (LTT) is calculated using a sliding scale based on the purchase price of the property. The rate increases as the price rises, so a larger purchase attracts a higher effective tax rate overall.

The tax applies to every conveyance of land in Ontario unless a specific exemption applies. The provincial schedule uses several thresholds, and the total tax is the sum of each bracket applied to the relevant portion of the price. For most residential properties, the rate climbs from 0.5% on the first portion up to 2.5% on amounts above $2 million.

If you are buying in the City of Toronto, a separate municipal land transfer tax applies on top of the provincial tax, calculated using a similar tiered structure. You pay both. Because the exact amount depends on your specific purchase price and the current rate schedule, your real estate lawyer will calculate the precise figure during the closing process and include it in your statement of adjustments. First-time buyers should ask their lawyer about the provincial first-time buyer rebate, which can significantly reduce this cost.