If you buy property in Ontario, you pay the province’s land transfer tax at closing, calculated on a sliding scale from 0.5% up to 2.5% of the purchase price. Buyers in Toronto pay a second municipal tax on top of that, and foreign buyers owe an extra 25% surcharge called the Non-Resident Speculation Tax. First-time buyers can claim rebates that erase the tax on homes up to roughly $368,000 provincially, with a further rebate available in Toronto.
How the Rate Brackets Work
Ontario uses a marginal system, so each slice of the price is taxed at its own rate:
- 0.5% on the first $55,000
- 1.0% on the portion from $55,000.01 to $250,000
- 1.5% on the portion from $250,000.01 to $400,000
- 2.0% on the portion from $400,000.01 to $2,000,000
- An additional 0.5% (2.5% marginal rate) on any portion above $2,000,000, but only for residential properties with one or two single-family units
Commercial properties and multi-unit residential buildings stop at 2% for everything above $400,000; the top 2.5% bracket does not apply to them.
A worked example makes the math concrete. On an $800,000 home, you owe $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.
What the Tax Is Calculated On
The taxable amount is the “value of the consideration,” meaning the cash purchase price plus any mortgages or other debts you take on as part of the deal. The tax is triggered when you register the transfer or acquire a beneficial interest in the land, so it can apply even without a formal deed registration, including situations like taking over the remaining term of a lease or receiving an ownership stake through a trust.
Personal property bundled into the sale, such as appliances, furniture, or window coverings, does not count toward the taxable value, but only if the purchase agreement separates those items and assigns each a reasonable dollar figure. Your lawyer carries that split through to the land transfer tax statements at closing. If the agreement lumps everything into a single price, you end up paying tax on chattels that could have been carved out.
First-Time Homebuyer Rebate
Eligible first-time buyers can claim a provincial rebate of up to $4,000. That fully offsets the tax on a home priced at or below $368,000. Above that price, you still get the full $4,000, but you pay tax on the portion of the price above the threshold.
You need to meet every one of these conditions:
- You are at least 18 years old and a Canadian citizen or permanent resident.
- You have never owned an eligible home, or any interest in one, anywhere in the world.
- Your spouse has not owned a home anywhere in the world while they were your spouse. If they did, neither of you qualifies.
- You move into the home as your principal residence within nine months of the transfer date.
If you buy with someone who does not qualify, the rebate is reduced in proportion to the qualifying buyer’s ownership share. You have 18 months from registration to apply, and your lawyer can usually claim it at closing so you never have to pay the money and wait for a refund.
Toronto’s Second Land Transfer Tax
Buying inside the City of Toronto means paying a municipal land transfer tax in addition to the provincial one. Toronto’s Municipal Land Transfer Tax mirrors the provincial rate structure at the lower brackets and adds steeper tiers at higher prices. For a single-family home at $1,000,000, the combined provincial and municipal tax roughly doubles what you would pay anywhere else in Ontario. Toronto’s rates changed effective April 1, 2026, so confirm the current schedule with the city before you rely on any number.
Toronto has its own first-time homebuyer rebate of up to $4,475, separate from the provincial rebate and stackable with it. The eligibility rules track the provincial ones: first-time buyer, 18 or older, Canadian citizen or permanent resident, and occupying the home as your principal residence. A qualifying buyer in Toronto can therefore receive up to $8,475 in combined rebates.
The 25% Surcharge on Foreign Buyers
Foreign nationals, foreign corporations, and certain trustees who buy residential property anywhere in Ontario owe the Non-Resident Speculation Tax at 25% of the purchase price, on top of the regular land transfer tax. The 25% rate has been in effect since October 25, 2022. On a $700,000 home, the NRST alone adds $175,000 to closing costs.
The exemptions are narrow. You may avoid the NRST if you are:
- A foreign national nominated under the Ontario Immigrant Nominee Program who has applied, or will apply, for permanent residency before the nominee certificate expires.
- A protected person granted refugee protection under federal immigration law.
- A foreign national married to a Canadian citizen, permanent resident, nominee, or protected person, provided both spouses are named on the transfer.
Every exemption requires that any co-purchasers also fall into an exempt category, and everyone on the transfer must certify they will occupy the property as a principal residence within 60 days of registration.
Other Exemptions Worth Knowing
Spousal and family transfers. Transfers between spouses, former spouses, children, or dependants can be exempt when the transfer is part of a separation agreement, a court order, or made for natural love and affection rather than a commercial price. Ontario Regulation 70/91 sets the conditions, and the transfer has to meet the criteria under both the registered conveyance and beneficial interest provisions to be fully exempt.
Inherited property. Property passing under a will or intestacy is generally exempt when a single beneficiary receives the land, and the value of the consideration is treated as nil even if the property carries a mortgage. The exemption breaks down if there are multiple beneficiaries and one buys out the others: the buyer owes tax on the value of the assets surrendered to the other beneficiaries. If the will instructs the executor to sell the property and distribute the proceeds, the sale itself is a taxable transaction.
Corporate reorganizations. Some transfers of land between affiliated corporations during a reorganization can qualify for an exemption or deferral, but only for unregistered dispositions of beneficial interests. Registered conveyances between corporations remain taxable at standard rates, and the conditions are technical enough that this route needs professional tax advice. If the holding period and structural requirements are not met, the deferred tax becomes immediately payable.
How the Tax Gets Paid
Nearly all Ontario property transfers are filed electronically through the Teraview platform, which connects directly to the provincial Land Registry Office. Your lawyer prepares the land transfer tax statements, discloses the purchase price and any mortgages assumed, and pays the tax by electronic funds transfer at the moment the deed is registered. The transfer cannot close until the tax is paid. Paper filings use a Land Transfer Tax Affidavit attached to the conveyance, with the same disclosure requirements.
Penalties for Understating the Price
Understating what you paid, or providing misleading information on the filings, carries real consequences. Under section 6 of the Act, false or deceptive statements are an offence punishable by a fine of at least $1,000 (or 50% of the tax that should have been paid, whichever is greater), up to double the tax evaded, plus up to two years of imprisonment. A separate provision under section 5.0.3 targets false statements tied to the Non-Resident Speculation Tax and carries a fine of up to $10,000. The Ministry of Finance reviews transactions and can reassess tax owing after closing.