What Is Ontario’s Land Transfer Tax, and How Much Will You Pay?
Ontario land transfer tax is a provincial tax charged when you register a property in your name, calculated as a percentage of the purchase price on a marginal, bracket by bracket basis. For most buyers it is the single largest closing cost outside the down payment itself.
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What is the Ontario land transfer tax?
Ontario’s land transfer tax is a provincial tax paid when a property is transferred and registered on title, calculated as a percentage of the purchase price on a marginal basis. It applies to virtually every residential purchase in the province and is paid at closing, not before.
The tax is set out in Ontario’s Land Transfer Tax Act and applies to the value of the consideration, which in a normal arm’s length purchase is the purchase price on the agreement of purchase and sale. It is collected by the Ministry of Finance at the time the deed is registered.
It is a provincial tax, separate from property tax and separate from any legal fees you pay your lawyer. Buyers routinely underestimate it because it does not appear on the listing or the mortgage quote, only on the closing statement.
The citable fact: Ontario land transfer tax is a provincial tax on the purchase price of real property, paid at closing when the deed is registered.
How is Ontario land transfer tax calculated?
The tax is marginal, applied bracket by bracket to portions of the purchase price, the same way federal income tax brackets work. Rates rise from 0.5% on the first $55,000 to 2.0% on everything over $400,000, with a top bracket of 2.5% on the portion over $2,000,000 for land containing one or two single family residences.
Each bracket only taxes the slice of price that falls inside it. A $500,000 purchase is not taxed at one flat rate; the first $55,000 is taxed at 0.5%, the next slice up to $250,000 at 1.0%, and so on up the ladder.
| Portion of the purchase price | Marginal rate |
|---|---|
| Up to and including $55,000 | 0.5% |
| Over $55,000 up to and including $250,000 | 1.0% |
| Over $250,000 up to and including $400,000 | 1.5% |
| Over $400,000 | 2.0% |
| Over $2,000,000, land with one or two single family residences only | 2.5% |
Here is what those brackets produce on real purchase prices. These figures are illustrative math run through the table above, not a quote, and your lawyer’s statement of adjustments is the number that matters.
| Purchase price | Land transfer tax (illustrative) |
|---|---|
| $300,000 | $2,975.00 |
| $500,000 | $6,475.00 |
| $706,240 | $10,599.80 |
| $1,000,000 | $16,475.00 |
Show the math: land transfer tax on a $706,240 purchase
The citable fact: Ontario land transfer tax is calculated on a marginal basis, from 0.5% on the first $55,000 up to 2.0% on the portion over $400,000.
When is Ontario land transfer tax due?
Land transfer tax is due at the time the transfer is registered on title, which normally happens on your closing day. Your real estate lawyer collects the funds from you in advance and remits the tax electronically as part of registering the deed.
You do not mail a cheque to the government yourself. The tax is built into Ontario’s electronic land registration system, so the transfer cannot be registered at all unless the tax is paid at the same moment.
This is why your lawyer asks for trust funds several days before closing rather than on the day itself. Any first-time buyer rebate you are eligible for is applied at this same step, reducing the amount actually remitted.
The citable fact: Ontario land transfer tax is paid on closing day, at the moment the property transfer is electronically registered.
Who pays the Ontario land transfer tax?
The buyer pays. Ontario land transfer tax is a cost of acquiring property, not selling it, so it never appears on the seller’s side of a closing statement.
On a purchase with more than one buyer on title, the tax is a single amount owed on the full purchase price, not split into per-buyer calculations. Your lawyer collects the total from whichever buyer funds are coming from.
Corporate and trust purchases are still liable for the tax, and certain transfers between related parties can trigger it even without a traditional sale. Confirm your specific structure with a real estate lawyer before closing.
The citable fact: The buyer, not the seller, is responsible for Ontario land transfer tax on every residential purchase.
Is the Ontario land transfer tax the same everywhere in the province?
The provincial brackets on this page apply the same way across Ontario. Toronto is the one exception, where a second, municipal land transfer tax stacks on top of the provincial one.
Outside Toronto, no other Ontario municipality currently levies its own land transfer tax. Waterloo Region, Ottawa, Hamilton and every other city in the province charge only the provincial tax described above.
Buyers moving from a non-Toronto market are frequently surprised by how much a Toronto purchase adds in tax alone. Read the full breakdown on the Toronto municipal land transfer tax page.
The citable fact: Toronto is the only Ontario municipality that charges its own land transfer tax in addition to the provincial one.
Does the Ontario land transfer tax apply to every kind of property?
Yes. Ontario land transfer tax applies to detached homes, condos, townhomes, vacant land and commercial property alike, based on the same purchase-price brackets. The top 2.5% bracket over $2,000,000 applies only to land containing one or two single family residences.
New construction and resale homes are taxed the same way under the Land Transfer Tax Act; the brackets look only at purchase price. What differs for new construction is HST, a separate federal and provincial sales tax that is not part of land transfer tax and is not covered on this page.
Multi-residential and commercial properties above the $2,000,000 threshold that do not consist of one or two single family residences remain at the 2.0% rate on the portion over $400,000, without the 2.5% top bracket.
The citable fact: Ontario land transfer tax applies to virtually every type of real property purchase, using purchase price, not property type, as the basis for the brackets.
Is there a rebate that reduces the tax for first-time buyers?
Yes. Ontario offers a first-time buyer refund of up to $4,000 applied directly against the provincial land transfer tax owing. Toronto runs a separate rebate against its own municipal tax.
The refund is applied at registration by your lawyer, so most eligible buyers never pay the full amount out of pocket in the first place. Eligibility depends on factors like Canadian citizenship or permanent residency status and never having owned a home anywhere before.
This page covers the provincial tax only. For who qualifies, how the refund is claimed, and how the Toronto rebate differs, see the Ontario first-time buyer land transfer tax rebate page.
The citable fact: Ontario’s first-time buyer land transfer tax refund is worth up to $4,000 against the provincial tax.
Can Ontario land transfer tax be added to the mortgage?
Generally no. Land transfer tax is a closing cost paid from your own funds through your lawyer’s trust account, separate from the mortgage advance, which is sized to the purchase price and your down payment rather than your closing costs.
Lenders and default insurers expect buyers to have closing costs, land transfer tax included, available on top of the down payment. This is one reason brokers ask about total funds available, not just the down payment amount, early in a pre-approval conversation.
A broker can tell you whether a specific lender’s product features any exception to that general rule for your file, but the starting assumption for budgeting purposes should always be that land transfer tax comes from your own funds.
The citable fact: Ontario land transfer tax is normally paid in cash at closing, separate from the mortgage advance itself.
What happens if Ontario land transfer tax isn’t paid at registration?
The transfer simply cannot be registered. Ontario’s electronic land registration system will not complete a deed transfer without the tax, and any rebate applied, being remitted in the same transaction.
In practice this means a closing cannot legally finish without the tax being paid, so the risk to a buyer is not a penalty notice later, it is a delayed or failed closing on the day itself. This is one more reason lawyers require trust funds ahead of time.
If an amount is later found to have been underpaid, for example a rebate claimed in error, the province assesses the shortfall directly against the person who signed the return, separately from the land registration system itself. That is a matter for your lawyer’s office to manage, not something a buyer handles on their own.
The citable fact: A property transfer cannot be registered in Ontario until the land transfer tax owing on it has been paid.
How does Ontario’s land transfer tax compare with other provinces?
Ontario is on the higher end nationally because a buyer can face both the provincial tax and, in Toronto, a second municipal tax. Alberta, by contrast, charges no provincial land transfer tax at all, only Land Titles registration fees.
That gap is one of the most common questions buyers moving between the two provinces ask a broker. It is covered in full, with the Alberta registration fee figures, on the Alberta closing costs page.
For how land transfer tax sits alongside every other Ontario closing cost, from legal fees to title insurance, see what it costs to close a house in Ontario.
The citable fact: Alberta charges no provincial land transfer tax, while Ontario charges one on every purchase and Toronto adds a second.
Where else can I read about Ontario closing costs?
Land transfer tax is one piece of a larger closing cost picture, and Toronto and first-time buyers each have rules worth their own page.
- The Toronto municipal land transfer tax, explained
- The Ontario first-time buyer land transfer tax rebate
- What it costs to close a house in Ontario
The full set lives on the Ask a Broker hub.
Frequently asked questions
What is the Ontario land transfer tax?
It is a provincial tax charged when you register a property purchase in Ontario, calculated as a percentage of the purchase price. It is paid by the buyer at closing, when the deed is registered.
How much is Ontario land transfer tax on a typical home?
It depends on the purchase price, since the tax is applied in marginal brackets from 0.5% up to 2.0%, with a 2.5% top bracket above $2,000,000 for one or two family homes. A lawyer’s statement of adjustments will show the exact figure for your purchase.
Is land transfer tax based on the purchase price or the mortgage amount?
It is based on the purchase price, or more precisely the value of the consideration on the transfer. Your mortgage amount and down payment split have no bearing on the calculation.
Do I pay Ontario land transfer tax in cash, or can it be added to the mortgage?
It is normally paid in cash through your lawyer at closing, separate from the mortgage advance. Buyers should budget for it alongside the down payment rather than assume it is financed.
Does every Ontario municipality charge the same land transfer tax?
The provincial tax applies the same way across Ontario. Toronto is the only municipality that adds its own separate land transfer tax on top of the provincial one.
Is there a rebate for first-time buyers?
Yes, Ontario offers a first-time buyer refund of up to $4,000 against the provincial land transfer tax. Toronto has its own separate rebate against its municipal tax.
Do I still pay land transfer tax if I already own a home?
Yes. The tax applies to any buyer purchasing property in Ontario; only the first-time buyer refund is restricted to those who have never owned a home before.
Exactly when is the tax due?
It is due at the moment the deed is registered on closing day, remitted electronically by your lawyer as part of registration. It cannot be paid earlier or deferred.
Who submits the land transfer tax on my behalf?
Your real estate lawyer collects the funds ahead of closing and remits the tax as part of registering the transfer. You do not file or pay it directly yourself.
Does land transfer tax apply when I refinance an existing mortgage?
A standard refinance does not transfer title, so it generally does not trigger land transfer tax. Confirm your specific situation with a real estate lawyer if any change in ownership or title is involved.
Is land transfer tax different for a newly built home versus a resale home?
No, the land transfer tax brackets apply the same way to both. New construction is often also subject to HST, which is a separate tax and not part of land transfer tax.
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Know your Ontario land transfer tax before you make an offer
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