How are Ontario land transfer tax rates calculated on a home purchase?
Ontario land transfer tax uses a graduated, bracket-based rate structure — similar to income tax brackets — so only the portion of the price within each bracket is taxed at that bracket's rate. As the purchase price increases, higher portions attract higher marginal rates.
For residential properties, the brackets start at 0.5% on the first portion of the price, rise through 1.0% and 1.5% on middle portions, and climb to 2.0% on amounts above a higher threshold. Amounts above an even higher threshold attract the top marginal rate. The exact dollar thresholds are set by the provincial government and may be adjusted over time, so always verify current figures before closing.
Because the tax is graduated, a modest increase in price does not dramatically increase total LTT — only the marginal portion in the higher bracket is taxed at the higher rate. Your lawyer will produce an exact calculation using the registered purchase price, including any adjustments for goods or chattels.
Key takeaways
- Ontario LTT uses graduated brackets, not a flat percentage of the whole price.
- Rates start at 0.5% and rise through several tiers as price increases.
- Only the portion of the price within each bracket is taxed at that bracket's rate.
- Confirm current thresholds with your lawyer before closing.