Do I pay extra land transfer tax just for buying in Toronto?

Yes. If you purchase property within the City of Toronto's boundaries, you pay two land transfer taxes: the standard Ontario provincial land transfer tax that applies across the entire province, plus a separate City of Toronto Municipal Land Transfer Tax (MLTT). Both are calculated at closing and are separate obligations.

The municipal tax uses a tiered rate structure similar to the provincial tax. Because you are paying two taxes on the same purchase price, the combined cost can be significantly higher than buying in any other Ontario municipality. For a typical resale home in Toronto, the combined land transfer taxes can represent a meaningful percentage of the purchase price.

First-time buyers can claim a Toronto first-time buyer rebate on the municipal portion, currently up to $4,475, in addition to the provincial rebate. Your lawyer will factor both taxes into your closing statement and apply any rebates you qualify for. If you are comparing properties near Toronto's borders, the difference in land transfer tax cost between a Toronto address and a neighbouring municipality can be tens of thousands of dollars on a higher-priced purchase, so it is worth factoring into your budget.