Closing & occupancy
How much land transfer tax will I pay on a new home in Ontario?
On a $1,100,000 home the Ontario land transfer tax is about $18,475. Inside the City of Toronto a municipal land transfer tax of roughly the same amount applies again. First-time buyers can claim up to $4,000 provincially and up to $4,475 in Toronto.
Land transfer tax is payable on closing, in cash, and it is usually the largest single closing cost on a new low-rise home.
The Ontario rates
Marginal rates on residential property:
| Portion of price | Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 – $250,000 | 1.0% |
| $250,000 – $400,000 | 1.5% |
| $400,000 – $2,000,000 | 2.0% |
| Above $2,000,000 | 2.5% |
Worked examples
A $1,100,000 freehold townhome:
- First $55,000 at 0.5% = $275
- Next $195,000 at 1.0% = $1,950
- Next $150,000 at 1.5% = $2,250
- Next $700,000 at 2.0% = $14,000
- Total: $18,475
A $1,500,000 detached home: about $26,475.
An $850,000 semi: about $13,475.
If the home is in Toronto
The City of Toronto levies its own municipal land transfer tax in addition, calculated on broadly similar bands for homes in this range. The practical effect is that your land transfer tax roughly doubles, on a $1,100,000 home, from about $18,475 to roughly $37,000.
Most new low-rise in the GTA is outside Toronto, Vaughan, Markham, Brampton, Caledon, Oakville, Milton, Pickering, Whitby, so one tax, not two. It is a real and underappreciated cost advantage of buying low-rise in the 905.
First-time buyer rebates
If you qualify as a first-time buyer:
- Ontario: up to $4,000, which fully covers the tax on a home up to roughly $368,000.
- Toronto: up to $4,475 on the municipal tax.
- Both can be claimed, for up to $8,475 in Toronto.
These are claimed by your lawyer at closing, so you never front the money, but confirm your lawyer has applied them.
Note that the first-time buyer test here is not identical to the test for the federal GST rebate. You can qualify for one and not the other. Ask your lawyer about each separately rather than assuming one answer covers both.
Budgeting for it
Land transfer tax is unavoidable, non-financeable and due on closing day. It belongs in your cash plan from the start, alongside levies, adjustments and legal fees, not as an afterthought.
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