How is Ontario land transfer tax calculated when buying a property?

Ontario land transfer tax (LTT) is a provincial tax paid by the buyer when a property is conveyed under the Land Transfer Tax Act. The tax is calculated on a graduated scale based on the "value of the consideration," which generally means the purchase price. The rates increase as the price rises, with higher percentages applying to higher price brackets.

For residential properties, an additional rate applies to the portion of the price over a threshold for higher-value homes. Toronto buyers also pay a separate municipal land transfer tax under City of Toronto bylaws, calculated on a similar sliding scale to the provincial one. Stacked together, Toronto land transfer taxes represent one of the largest closing costs in the country.

First-time homebuyers may qualify for a provincial rebate of up to a specified maximum (confirmed annually by the province), and Toronto offers a separate first-time buyer municipal rebate as well. The rebates are applied directly at closing through your lawyer. Non-residents of Canada purchasing certain Ontario residential properties may also be subject to a Non-Resident Speculation Tax (NRST), which is separate from LTT.