Land Transfer Tax in Canada: What It Costs and Who Gets It Back
Buy an $800,000 house in Toronto and the land transfer tax is $24,950. Not a fee buried in the mortgage, not a percentage skimmed off over time: a five-figure amount, payable in full when the deed is registered, on top of the down payment and before the moving truck. For most buyers it is the largest single closing cost, and it is the one that surprises people who budgeted carefully for everything else.
The tax goes by different names in different provinces, the brackets differ, Toronto charges it twice, and every version comes with a first-time buyer break worth knowing about before you sign. Here is how the three biggest bills work, with the arithmetic shown.
How the tax is calculated
Land transfer tax works like income tax: the rates are marginal, so each rate applies only to the slice of the purchase price inside its band, not to the whole price. Ontario publishes its brackets in Calculating Land Transfer Tax on ontario.ca. For a property with one or two single-family residences:
| Portion of the price | Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 to $250,000 | 1.0% |
| $250,000 to $400,000 | 1.5% |
| $400,000 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
On an $800,000 purchase, that stacks up as $275 on the first $55,000, plus $1,950 on the next $195,000, plus $2,250 on the next $150,000, plus $8,000 on the final $400,000. Total: $12,475. The number that matters is not any single rate but the way the 2% band does the heavy lifting once a price clears $400,000, which nearly every house in southern Ontario now does.
Toronto charges it twice
Buy inside the City of Toronto and a Municipal Land Transfer Tax applies on top of the provincial one. Its bands mirror Ontario’s up to $2,000,000, add a 2.5% band to $3,000,000, and the city collects an administration fee of $102.56 plus HST on each transaction. The result is close to a doubling: the same $800,000 house that owes $12,475 provincially owes another $12,475 municipally, for $24,950 all in. At $1,000,000, a very ordinary Toronto price, the combined bill is $32,950.
Above $3,000,000 the city goes further. Toronto’s published MLTT rate schedule added graduated high-value tiers for single-family residences effective April 1, 2026:
| Portion over $3,000,000 | Rate |
|---|---|
| $3,000,000 to $4,000,000 | 4.40% |
| $4,000,000 to $5,000,000 | 5.45% |
| $5,000,000 to $10,000,000 | 6.50% |
| $10,000,000 to $20,000,000 | 7.55% |
| Over $20,000,000 | 8.60% |
Foreign buyers face a separate Municipal Non-Resident Speculation Tax of 10% of the full purchase price on certain residential properties, in force since January 1, 2025, on top of everything above.
British Columbia’s version
BC calls it the property transfer tax and uses three bands: 1% on the first $200,000 of fair market value, 2% from there to $2,000,000, and 3% above that, with a further 2% on the residential portion of value over $3,000,000. Fewer bands and a higher entry rate mean BC collects more than Ontario at the same price: $14,000 on an $800,000 home and $18,000 at $1,000,000, against Ontario’s $12,475 and $16,475 outside Toronto.
What first-time buyers get back
Each government runs its own relief, and the three programs are built differently.
Ontario refunds up to $4,000 of the provincial tax. The ministry’s page on refunds for first-time homebuyers puts it plainly: qualifying first-time purchasers pay no land transfer tax on the first $368,000 of the price, and above that the refund caps at $4,000. There is no price ceiling on eligibility, so the refund is worth the same $4,000 on a $500,000 condo as on a $900,000 house. It can be claimed instantly at registration, so the cash never leaves your account.
Toronto adds its own rebate of up to $4,475 against the municipal tax, with a matching first-time definition. A first-time buyer of that $800,000 Toronto house gets $8,475 back across the two programs and still pays $16,475.
BC is the most generous at the entry level and the strictest above it. The first time home buyers’ program gives a full exemption on the first $500,000 of the price, but only if the property’s fair market value is $835,000 or less (a threshold in effect since April 1, 2024), with a partial exemption running to $860,000 and nothing beyond that. Under the cap it is powerful: the first-timer buying at $800,000 pays $6,000 instead of $14,000. One dollar of price over the partial-exemption ceiling and the whole benefit is gone.
| $800,000 purchase | Repeat buyer | First-time buyer |
|---|---|---|
| Ontario, outside Toronto | $12,475 | $8,475 |
| Toronto (provincial + municipal) | $24,950 | $16,475 |
| British Columbia | $14,000 | $6,000 |
Three details that catch people
Your spouse’s history is your history. Ontario disqualifies you if your spouse owned a home anywhere in the world while they were your spouse, so a first-time buyer marrying a homeowner loses the refund. Toronto’s rebate applies the same spousal test, and BC separately disqualifies anyone who has received its exemption before.
A parent on title costs real money. When a bank insists a parent co-sign and go on title, Ontario prorates the refund to the first-time buyer’s share. Its own example: parent and child buy 50/50, and the child can claim only 50% of the maximum. Worse, the tax must be paid in full at registration and the partial refund claimed from the ministry afterwards. If the lender will accept the parent’s backing without putting them on title, the refund survives intact.
BC’s break has a residency string attached. The BC exemption must be applied for in the transfer return and comes with occupancy requirements during the first year of ownership. Buy the property, rent it out, and the exemption can be lost.
Where it fits in the budget
Land transfer tax is due when the transfer registers, which makes it a closing-day cash item alongside the down payment, legal fees and title insurance. It belongs in the same arithmetic as the down payment itself when you work out how much mortgage you can afford, because a buyer who saves exactly 10% down and nothing else cannot close. For a first home, that closing cash can grow tax-free inside an FHSA; our FHSA guide covers the mechanics and the contribution limits.
One consolation, though not for a principal residence: on a rental or other investment property, the CRA counts transfer taxes among the acquisition costs that join the property’s adjusted cost base, which shrinks the eventual capital gain. Our piece on what adds to a home’s cost base walks through that ledger.
Rates and thresholds above are the provinces’ and the city’s published figures as of September 17, 2026. Other provinces set their own rates, names and rebates for the same tax, so buyers elsewhere should check their province’s published schedule before budgeting.
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