Buying a home in Toronto involves two layers of land transfer tax, one charged by Ontario and one by the City of Toronto, plus legal fees and other closing costs. The Financial Consumer Agency of Canada advises budgeting 1.5 to 4 percent of the purchase price for upfront costs, and the land transfer taxes are usually the largest part of that sum.
The steps of a purchase
A typical purchase moves through a short sequence: arranging financing, finding a property, signing an agreement of purchase and sale with any conditions, a period for inspection and financing checks, and a closing date on which the lawyer registers the transfer. While some buyers choose to purchase their home in cash, most finance the purchase with a mortgage, which adds a lender’s requirements, including its own lawyer’s checks, to the same timetable.
Ontario land transfer tax
According to the Government of Ontario, the provincial tax is marginal: each rate applies only to the part of the price inside its bracket.
| Portion of the price | Ontario rate |
|---|---|
| Up to $55,000 | 0.5 percent |
| $55,000 to $250,000 | 1.0 percent |
| $250,000 to $400,000 | 1.5 percent |
| Over $400,000 | 2.0 percent |
| Over $2,000,000 (land with one or two single-family residences) | 2.5 percent |
First-time buyers can claim a refund of up to $4,000, which means no provincial tax is payable on the first $368,000 of value for eligible homes. The buyer must be at least 18, be a Canadian citizen or permanent resident, occupy the home as a principal residence within nine months, and never have owned a home anywhere in the world. The claim must be made within 18 months of registration.
Toronto’s municipal land transfer tax
Properties inside the city’s boundaries carry a second tax. The City of Toronto’s rates page lists the same brackets as the province up to $2,000,000, then higher rates for one- and two-unit residences that took effect on April 1, 2026, after City Council passed the amendment on December 17, 2025.
| Portion of the price (one or two residences) | Toronto rate |
|---|---|
| Up to $55,000 | 0.5 percent |
| $55,000 to $250,000 | 1.0 percent |
| $250,000 to $400,000 | 1.5 percent |
| $400,000 to $2,000,000 | 2.0 percent |
| $2,000,000 to $3,000,000 | 2.5 percent |
| $3,000,000 to $4,000,000 | 4.40 percent |
| $4,000,000 to $5,000,000 | 5.45 percent |
| $5,000,000 to $10,000,000 | 6.50 percent |
| $10,000,000 to $20,000,000 | 7.55 percent |
| Over $20,000,000 | 8.60 percent |
The same page lists other residential properties at 0.5, 1.0, and 1.5 percent up to $400,000 and 2.0 percent above it. The page was last modified on April 7, 2026. The City also runs a rebate for first-time buyers. Its Municipal Code set the maximum at $4,475 for transfers on or after March 1, 2017, but City Council asked staff in December 2025 to extend the rebate, and the current amount should be confirmed on the City’s rebate page before budgeting.
As arithmetic from the published brackets, a home bought at $800,000 would owe $12,475 in Ontario tax (275 + 1,950 + 2,250 + 8,000) and the same amount in Toronto tax, about $24,950 before any refund. This is an illustration, not a quote.
Closing costs and the lawyer
The Financial Consumer Agency lists home inspection fees, legal fees, property tax adjustments, and title insurance as typical upfront costs. In Ontario, the Law Society’s practice guidelines for residential transactions make the lawyer responsible for reviewing title search reports personally, and generally one lawyer may not act for both seller and buyer. ServiceOntario’s land registry staff cannot search records or give legal advice, which is why buyers use a lawyer or title searcher. Land transfer tax is payable on registration, so the lawyer’s closing statement normally shows it.
Market statistics
Price and sales figures change monthly, and this article does not print them. The Toronto Regional Real Estate Board and the Canadian Real Estate Association publish dated monthly statistics, and any figure from them should be read with its month. Nothing here forecasts where prices will go.
Frequently asked questions
Does a buyer in Toronto pay two land transfer taxes?
Yes. Ontario charges its tax everywhere in the province, and the City of Toronto adds a municipal tax for property inside the city.
How much can a first-time buyer get back?
Ontario’s refund is up to $4,000. The City’s rebate was set at a maximum of $4,475 in its Municipal Code, with changes proposed in December 2025, so the City’s page governs.
How much should be set aside for closing costs?
The federal Financial Consumer Agency suggests 1.5 to 4 percent of the purchase price.
Is a lawyer required?
Ontario practice runs through lawyers for title searches and registration. Whether a particular buyer needs one is a legal question for the Law Society or a lawyer.
Last verified: October 2026
Sources
- Ontario Ministry of Finance, Calculating Land Transfer Tax
- Ontario Ministry of Finance, Land Transfer Tax Refunds for First-Time Homebuyers
- City of Toronto, Municipal Land Transfer Tax rates and fees
- Financial Consumer Agency of Canada, Buying a home
- Law Society of Ontario, Residential Real Estate Transactions Practice Guidelines
Related reading
- The history of Toronto’s neighbourhoods
- Liberty Village and its change from factories to housing
- Toronto’s mayors and municipal elections
- Postal codes in Toronto
- Living in Toronto: the hub
Cite this page
APA: History of Toronto. (2026, October 27). Buying a Home in Toronto: Land Transfer Tax and Closing Costs. https://historyoftoronto.ca/blog/toronto-real-estate-market-continues-to-thrive-as-demand-for-homes-remains-high
MLA: “Buying a Home in Toronto: Land Transfer Tax and Closing Costs.” History of Toronto, 27 Oct. 2026, https://historyoftoronto.ca/blog/toronto-real-estate-market-continues-to-thrive-as-demand-for-homes-remains-high. Accessed .
Chicago: History of Toronto. “Buying a Home in Toronto: Land Transfer Tax and Closing Costs.” Last modified October 27, 2026. https://historyoftoronto.ca/blog/toronto-real-estate-market-continues-to-thrive-as-demand-for-homes-remains-high.
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