Understanding Land Transfer Cost in the GTA, Hamilton and Simcoe County
TL;DR
- Ontario charges land transfer tax on home purchases using marginal rates from 0.5% up to 2.5%.
- Buying in Toronto adds a municipal land transfer tax that roughly doubles the total.
- First-time buyers may get up to $4,000 back from Ontario and up to $4,475 from Toronto.
- Budget for legal fees, title insurance and other closing costs on top of land transfer tax.
When you buy a house, condo or other property in Ontario, you have to pay land transfer tax (LTT) to the province when the deal closes. Most provinces charge some form of land transfer tax or registration fee, and the amount depends on the province, the municipality and the price of the property.
How Much Does It Cost?
In Ontario, land transfer tax is calculated in marginal brackets – like income tax – on the purchase price. For homes with one or two single-family residences (condo units included), the rates are: 0.5% on the first $55,000; 1% on the portion from $55,000 to $250,000; 1.5% from $250,000 to $400,000; 2% from $400,000 to $2 million; and 2.5% above $2 million. If you buy in the City of Toronto, you also pay a municipal land transfer tax that matches the provincial rates, with higher luxury rates on homes above $3 million.
For example (before any first-time buyer refunds):
- If you buy a property for $600,000 outside Toronto, your Ontario land transfer tax will be $8,475. In Toronto, you’d pay about double, or $16,950, once the municipal tax is added.
- If you buy a property for $1 million outside Toronto, your Ontario land transfer tax will be $16,475. In Toronto, the total would be $32,950.
Is There Any Way to Avoid It?
You can’t avoid it entirely, but if you are a first-time homebuyer, you may be eligible for an Ontario land transfer tax refund of up to $4,000. In Toronto, eligible first-time buyers can also get a municipal land transfer tax rebate of up to $4,475. Your lawyer can usually apply these at closing.
What Else Do I Need to Know?
The land transfer cost is just one of many costs involved in buying a property. You will also need to pay for things like legal fees, appraisal fees, and title insurance. It is important to factor in all of these costs when you are budgeting for your home purchase.
How Can I Learn More?
If you are buying a property, it is a good idea to get help from a real estate agent. A real estate agent can help you understand the land transfer cost and other costs involved in buying a property.
I’m Ready to Buy a Property!
If you are ready to buy a property, contact Condo Connect today. Our condo specialists can help you find the right property, and our listing alerts make it easy to keep up with new condos for sale.
Frequently asked questions
How is land transfer tax calculated in Ontario?
Ontario uses marginal brackets: 0.5% on the first $55,000, 1% up to $250,000, 1.5% up to $400,000, 2% up to $2 million and 2.5% above that for homes with one or two single-family residences. For example, a $600,000 purchase outside Toronto carries $8,475 in provincial land transfer tax.
Do first-time buyers pay land transfer tax in Ontario?
First-time buyers still pay land transfer tax but may qualify for a refund of up to $4,000 from Ontario, which covers the full tax on homes up to about $368,000. In Toronto, they may also get up to $4,475 back on the municipal tax. Eligibility rules apply, including occupying the home.
Do I pay land transfer tax on a pre-construction condo?
Yes. Land transfer tax is paid when title transfers to you at final closing, based on the purchase price, which can include certain adjustments. With a new condo, you may occupy the unit and pay interim occupancy fees for months before final closing and registration, when the tax becomes due.
Is land transfer tax included in my mortgage?
No. Land transfer tax is a closing cost you pay from your own funds on closing day, through your lawyer. Lenders generally expect you to have enough money set aside for closing costs on top of your down payment, so include it in your budget early.