- The Ontario Land Transfer Tax is levied under the Land Transfer Tax Act and applies to almost every purchase of land or an interest in land in Ontario.
- Ontario's LTT uses a marginal rate structure, similar in concept to how income tax brackets work.
- Ontario Land Transfer Tax is due and payable on the closing date — the day legal title transfers to you.
If you're buying property in Ontario, one of the largest single costs you'll encounter — often thousands of dollars — is the Ontario Land Transfer Tax (LTT). It's a provincial tax collected every time ownership of real property changes hands, and unlike most taxes, you pay it in full on a single day: closing day.
Many buyers are caught off-guard by the size of the bill. Understanding how the tax is calculated, when it applies, and what relief is available can help you plan your budget accurately — and ensure you don't miss a rebate you're entitled to.
What Is the Ontario Land Transfer Tax?
The Ontario Land Transfer Tax is levied under the Land Transfer Tax Act and applies to almost every purchase of land or an interest in land in Ontario. The tax is the buyer's responsibility — the seller does not pay it.
"Land" for LTT purposes includes bare land, houses, condominiums, commercial buildings, and most other real property. There are narrow exemptions (such as certain transfers between spouses or corporate reorganizations), but for a standard home purchase, assume LTT applies.
Your real estate lawyer collects the LTT from you on closing day and remits it to the province as part of registering the transfer in the land registry.
How the Sliding Scale Works
Ontario's LTT uses a marginal rate structure, similar in concept to how income tax brackets work. Each portion of the purchase price is taxed at a different rate; the total LTT is the sum of each tier.
The tiers — as of writing, verify current thresholds at ontario.ca — look roughly like this:
| Purchase Price Portion | Approximate Rate |
|---|---|
| First ~$55,000 | 0.5% |
| $55,000 – ~$250,000 | 1.0% |
| $250,000 – ~$400,000 | 1.5% |
| $400,000 – ~$2,000,000 | 2.0% |
| Over ~$2,000,000 | 2.5% |
Important: The exact thresholds and rates are set by regulation and can be updated. Always confirm the current figures with your lawyer or on the ServiceOntario / ontario.ca website before budgeting.
A Worked Example
For a home purchased at $800,000 (approximate illustration only — use current rates):
- 0.5% on the first $55,000 = $275
- 1.0% on $55,000 to $250,000 = $1,950
- 1.5% on $250,000 to $400,000 = $2,250
- 2.0% on $400,000 to $800,000 = $8,000
- Total provincial LTT ≈ $12,475
The actual numbers will differ based on the exact purchase price and current rate thresholds — this illustrates how quickly the tax accumulates on a mid-range Ontario home.
When Is the LTT Due?
Ontario Land Transfer Tax is due and payable on the closing date — the day legal title transfers to you. There is no option to defer or pay in instalments. Your lawyer calculates the exact amount once the purchase price is finalized, includes it in your closing funds statement, and remits it to the province electronically at registration.
The First-Time Home Buyer LTT Rebate
Ontario offers a meaningful rebate for eligible first-time home buyers. As of writing, the maximum rebate is up to $4,000 on the provincial LTT. For lower-priced homes, this can eliminate the provincial tax entirely; for more expensive purchases, it reduces — but does not eliminate — the bill.
Who Qualifies?
To receive the provincial first-time buyer rebate, you generally must:
- Never have owned an eligible home or an interest in an eligible home anywhere in the world, at any time.
- Be a Canadian citizen or permanent resident.
- Move into the home as your principal residence within nine months of closing.
- If you have a spouse or partner who has previously owned a home, you may not be eligible — the rules look at the buyer's household history. Confirm your specific situation with your lawyer.
How Is the Rebate Applied?
Your lawyer applies for the rebate automatically when registering the transfer, provided you confirm your eligibility. You do not file a separate application after the fact. The rebate is applied directly against the LTT owing, reducing the amount you need to bring to closing.
Always verify the current maximum rebate amount and eligibility criteria at ontario.ca or with your lawyer — the province can and does adjust the program.
What About Toronto?
If your property is within the boundaries of the City of Toronto, you pay the provincial LTT and a second tax: the Toronto Municipal Land Transfer Tax (MLTT). The MLTT uses a parallel sliding-scale structure, effectively doubling the land transfer tax bill for Toronto buyers.
First-time buyers purchasing in Toronto may also qualify for a separate Toronto MLTT rebate. The Toronto rebate has its own maximum amount and eligibility rules. See our dedicated article on the Toronto Municipal Land Transfer Tax for a full breakdown.
Other LTT Considerations
New Builds and Assignment Sales
For new construction, LTT is typically calculated on the base purchase price plus any extras and upgrades included in the purchase price — not just the base price on the front page of your agreement. For assignment sales (where you purchase a contract from a previous buyer before construction is complete), the LTT rules can be more complex. Confirm the taxable amount with your lawyer early.
Refinancing
LTT does not apply when you refinance your mortgage. The tax only arises when ownership itself changes hands.
Non-Residents and Speculation Tax
A separate Non-Resident Speculation Tax (NRST) may apply to buyers who are not Canadian citizens or permanent residents and who purchase residential property in certain parts of Ontario. This is a distinct tax from the LTT, with its own rate and conditions. If residency status is a factor in your purchase, raise it with your lawyer immediately.
Frequently asked questions
Can the LTT be added to my mortgage?
No. The Ontario Land Transfer Tax must be paid from your own funds on closing day. Your mortgage covers the purchase price; the LTT is a separate cash obligation. Budget for it as part of your total closing cost planning.
Is LTT the same on a condo as on a house?
Yes — the LTT calculation is based on the purchase price of the property, not its type. A condominium purchased for $600,000 attracts the same provincial LTT as a freehold house at $600,000. The type of property does not change the rate; however, what is included in the "purchase price" (e.g., parking units, storage lockers) should be clarified with your lawyer.
What if the purchase price is lower than market value — a gift from family, for example?
Ontario's Land Transfer Tax Act contains rules addressing non-arm's-length transfers and situations where the stated consideration is below fair market value. In some cases, the province can assess LTT on fair market value rather than the stated price. If you're purchasing from a family member at a discounted price, discuss the LTT implications with your lawyer before the deal closes.
Do I get the rebate if I'm buying with someone who has owned a home before?
If a co-purchaser has previously owned a home, that may affect the rebate. The rebate is prorated based on the interest acquired by the eligible first-time buyer. For example, if you and a previous homeowner are purchasing equally, you might only receive a rebate on half the eligible amount. Your lawyer will calculate this for your specific situation.
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