The Toronto land transfer tax is a municipal tax that you will be responsible for paying as a home buyer when you purchase your home. Land transfer tax can be a significant cost to home buyers, and is determined based on your property purchase price, with different marginal transfer tax brackets used to calculate your tax amount. In addition to paying Toronto land transfer tax, you will also owe a provincial Ontario land transfer tax. As a first time home buyer, you will be able to receive a reduction in your land transfer tax bill for both your Toronto transfer tax, and your Ontario transfer tax. Using the calculator below, you will be able to estimate how much you will need to pay in land transfer taxes, along with how much you may receive in rebates.
I am a citizen or permanent resident of Canada
I am a first-time home buyer
Best 5 -Year Fixed Mortgage Rates in Canada Select Mortgage Term: See More RatesYour Toronto land transfer tax is calculated using a marginal tax rate system, which is based on the purchase price of your home. The higher your purchase price is, the more in land transfer taxes that you will incur. Land transfer taxes start at 0.5% for the first $55,000 in purchase price, and progressively increase all the way up to a transfer tax of 2.5% for each dollar of purchase price over $2,000,000. In total, your combined provincial and municipal transfer taxes will equal double what the taxes are in Toronto, with the same transfer tax rates in Ontario.
| Home Purchase Price | Toronto Land Transfer Tax Rate | Combined Land Transfer Tax Rate(Toronto & Ontario) | First Time Home Buyer Combined Rebate |
|---|---|---|---|
| First $55,000 | 0.5% | 1% | Full Rebate |
| $55,000 to $250,000 | 1% | 2% | Full Rebate |
| $250,000 to $400,000 | 1.5% | 3% | Full Rebate up to $368,333 |
| $400,000 to $2,000,000 | 2% | 4% | $8475 Maximum Rebate |
| Over $2,000,000 | 2.5% | 5% | $8475 Maximum Rebate |
Toronto land transfer tax was originally introduced in February 2008, after the Toronto City Council approved the tax in 2006 through an act called the City of Toronto Act. Before Toronto had a municipal land transfer tax, homebuyers in Toronto were still paying the provincial land transfer tax, which was introduced in Ontario in 1974.
The reason why Toronto put the municipal land transfer tax in place was to raise more money for the city’s budget. With home prices rising over 200% since 2008, when the tax was put in place, it has led to the city of Toronto’s revenue from this tax also skyrocketing. This has helped the city to fund more municipal projects and programs, with the transfer tax making up ~5% of the Toronto 2021 city budget.
Yes, condos will still incur both Toronto and Ontario land transfer taxes. Even though the land that your condo is built on is shared with other condo owners in your building, the municipality will still base your land transfer tax on your condo purchase price. Since condos in Toronto do have a lower purchase price than the average home price, you will likely have a lower land transfer tax bill purchasing a condo. For the average condo price of $674,490, the amount of Toronto land transfer tax you would owe would be $9964, and total land transfer tax including Ontario’s tax would be $19,929. Below shows how your land transfer tax will change based on the purchase price of your condo.
| Purchase Price | Toronto Land Transfer Tax Owed | Total Land Transfer Tax Owed (Toronto + Ontario) |
|---|---|---|
| $400,000 | $4475 | $8950 |
| $500,000 | $6475 | $12,950 |
| $600,000 | $8475 | $16,950 |
| $700,000 | $10,475 | $20,950 |
Similarly to Ontario land transfer tax, Toronto’s land transfer tax is to be paid when the transaction is completed and you take possession of the property. This will be on your closing day, and it's likely your lawyer who is acting on your behalf will pay it on this day. In a normal real estate transaction, the closing date usually will come 60 to 90 days after your purchase and sale agreement offer is accepted.
Best 5 -Year Fixed Mortgage Rates in Toronto Select Mortgage Term: See More RatesFor those who are purchasing a Toronto pre-construction condo, your land transfer tax will be due at your closing date, similar to a normal home purchase. The main difference is when this is, with your closing date being after the city has finished their inspection, and after the building is officially registered. Usually this date will be given to your lawyer, who will inform you of it.
In Ontario it is mandatory to have a lawyer act on your behalf in the purchasing and mortgaging of a property, meaning you will not need to worry about how to pay the city of Toronto. What is more important for your land transfer tax bill is finding a good lawyer to operate on your behalf. The most common way your lawyer will pay this bill for you is by arranging with the city for the funds to be paid on the day you close on the house.
Since the city of Toronto is the only place in the GTA that will have this municipal land transfer tax, city boundaries are important. The official boundaries for Toronto include anywhere that is located south of Steeles Avenue, east of Etobicoke, which includes east of Eglinton Avenue, Etobicoke Creek, and Highway 427, west of the Pickering and Scarborough town line, and north of Lake Ontario. This means that the following regions are included in the city of Toronto:
Since the start of municipal land transfer taxes in the city of Toronto in 2008, the transfer tax bracket changed last in 2017. In this revision, the land transfer tax bracket in Toronto was expanded, going from 3 land transfer tax brackets for residential properties, to 5 currently. This has also led to land transfer tax rates rising, with a new highest tax bracket of 2.5% on amounts over $2,000,000, versus the previous highest bracket of 2% on amounts over $400,000.
Although the amount of land transfer tax being charged has changed with the bracket being revised, so has the municipal transfer tax rebate for first time buyers. This maximum went from $3725 to $4475 in 2017, in order to help make up for the difference in transfer taxes from the change.
Besides just the land transfer tax brackets changing in 2017, higher home prices over the years have led to higher land transfer tax amounts being owed to the city. For example, the average home price for a detached home in Toronto in 2008 was ~$435,000. On this home, $4425 would be charged in land transfer taxes based on the pre-2017 bracket. This differs from the average detached price of $1,405,478 today, which would have $24,584 in land transfer taxes using the post-2017 tax bracket. This means that land transfer taxes on average have risen over 5x for the average single family home over the course of 13 years!
According to the latest Toronto municipal budget, the city of Toronto expects $700 million in municipal land transfer taxes in 2021. This makes up around 5% of the city's budget, with it being the 5th largest source of revenue for the city of Toronto. This makes land transfer tax an important part of the city's budget, allowing Toronto to run a balanced budget and still have some of the lowest property tax rates in Canada.