Ontario Land Transfer Tax Rebate for First-Time Buyers: What You Can Claim

Buying your first home in Ontario comes with a significant upfront cost that many buyers underestimate: land transfer tax. The good news is that first-time buyers are entitled to a rebate that can put thousands of dollars back in your pocket. Understanding the Ontario land transfer tax rebate before you close can help you budget accurately and make sure the credit is applied correctly.

This article explains how the provincial rebate works, what the City of Toronto adds on top, and what you need to do to qualify.

What Is Land Transfer Tax?

Land transfer tax (LTT) is a provincial tax paid by the buyer every time ownership of land in Ontario changes hands. It is calculated as a percentage of the property's purchase price, and the rate increases in tiers as the price rises. The tax is paid on closing — your real estate lawyer collects it and remits it to the province at the same time as they register the deed.

Toronto buyers pay two land transfer taxes: one to the province and one to the City of Toronto. Both have their own first-time buyer rebates.

The Provincial First-Time Buyer Rebate

As of writing, first-time buyers of an eligible home in Ontario can receive a rebate of up to a set maximum against the provincial land transfer tax — verify the current maximum at ServiceOntario or with your lawyer, as the limit is set by regulation and may be updated. The rebate is applied directly on closing and appears as a credit on your statement of adjustments. You do not have to file a separate form after the fact; your lawyer handles it when the deed is registered electronically through Teraview.

Who Qualifies?

To receive the provincial rebate you must:

1. Be a Canadian citizen or permanent resident (as of closing).
2. Be at least 18 years old.
3. Have never owned an eligible home anywhere in the world — including a home owned by a spouse while you were married to or cohabiting with that person.
4. Intend to occupy the home as your principal residence within nine months of closing.
5. Be buying an eligible property: a detached, semi-detached, townhouse, or condominium in Ontario. Vacant land without a structure does not qualify.

The Spouse Rule

If you are buying with a spouse (married or common-law) and your spouse has previously owned a home, the rebate is reduced proportionally based on your ownership share. For example, if you each own 50% and your spouse is ineligible, you may claim only half the rebate. Get clarity on this before you finalize the transaction.

The Toronto Land Transfer Tax Rebate

If you are buying in the City of Toronto, you are subject to the Municipal Land Transfer Tax on top of the provincial tax. Toronto offers its own first-time buyer rebate (up to its own maximum — check the current figure with the City of Toronto). The eligibility rules mirror the provincial rules closely.

The Toronto rebate is also applied at closing through your lawyer. If you are buying a new build from a builder, ensure your lawyer confirms the rebate is captured; assignment closings and certain builder arrangements can create complications.

How the Rebate Is Applied

Your real estate lawyer will:

• Calculate the full land transfer tax owing based on the purchase price.
• Apply any rebate(s) you qualify for as a credit.
• Collect only the net amount (tax minus rebate) from you on closing day.

You should see both the tax and the rebate as line items on your statement of adjustments. If you are buying a resale property, this is straightforward. If you are buying a new construction home, HST adjustments appear on the same closing statement and can obscure the LTT lines — ask your lawyer to walk you through the statement before closing.

Common Mistakes First-Time Buyers Make

Assuming the full rebate always covers the tax. On higher-priced homes, the rebate covers only a portion of the total LTT owing. Budget for the remainder.

Forgetting the Toronto rebate. Some Toronto buyers (and their agents) remember the provincial rebate but overlook that Toronto has a matching rebate. Do not leave money on the table.

Co-buying with a non-first-time buyer without adjusting expectations. If your partner has owned before, your rebate entitlement is reduced. Calculate this in advance.

Buying in a trust or corporation. The rebate applies only to individuals purchasing in their own name. Corporate or trust acquisitions do not qualify.

Budgeting Tip: Factor in the Net Tax, Not Zero

Even with the rebate, on a mid-range Ontario purchase you will likely owe some provincial LTT above the rebate cap. In Toronto, the same applies to the municipal tax. Use the rebate as a known credit in your budget, not an assumption that LTT is zero.

Frequently asked questions