Ontario Land Transfer Tax Guide 2026: Rates, Rebates, and Exemptions

Land transfer tax is one of the largest closing costs Ontario home buyers face. Understanding how it is calculated and what rebates are available can save you thousands of dollars. For first-time buyers in Ontario, the land transfer tax rebate can reduce or eliminate this cost entirely. Despite being one of the most significant closing costs, land transfer tax is often overlooked by buyers who focus exclusively on the down payment. Knowing the rates and available exemptions before you make an offer allows you to budget accurately and avoid surprises on closing day.

What is land transfer tax?

Land transfer tax is a one-time tax paid when a property changes ownership in Ontario. It is calculated as a percentage of the purchase price and is payable at closing. The tax is collected by the provincial government, and in some cities (notably Toronto), an additional municipal land transfer tax applies. The tax is typically paid through your lawyer as part of the closing process, meaning you need to have these funds available in addition to your down payment.

Land transfer tax is not deductible on your personal income tax return unless the property is used for business or rental purposes. For a primary residence, it is simply a cost of purchasing the home.

Ontario land transfer tax rates (2026)

The provincial land transfer tax is calculated on a sliding scale that increases with the purchase price. The rates are applied progressively, meaning each portion of the price is taxed at its corresponding rate:

• 0.5% on the first $55,000
• 1.0% on the portion from $55,001 to $250,000
• 1.5% on the portion from $250,001 to $400,000
• 2.0% on the portion from $400,001 to $2,000,000
• 2.5% on the portion over $2,000,000

How to calculate your exact land transfer tax

You can estimate your land transfer tax using online calculators provided by real estate websites or your lawyer's office. For a home under $400,000, multiply the purchase price by 1.0% and subtract $275. For homes between $400,000 and $2,000,000, a rough estimate is 2.0% of the purchase price minus $3,525. These formulas give approximate values — your lawyer will calculate the exact amount based on your specific purchase price and any applicable exemptions.

First-Time Home Buyer Rebate

Ontario offers a full rebate of the land transfer tax for eligible first-time buyers, up to a maximum of $4,000. This rebate is claimed through your lawyer at closing, reducing the cash you need to bring on closing day. To qualify:

• You must be a Canadian citizen or permanent resident
• You must be at least 18 years old
• You cannot have owned a home anywhere in the world before — this means anywhere globally, not just in Canada
• Your spouse cannot have owned a home while they were your spouse (even if they owned it before marriage, it may not disqualify you depending on timing)
• The property must be your principal residence within 9 months of closing

The rebate reduces the land transfer tax you pay dollar-for-dollar up to $4,000. If your calculated land transfer tax is $3,500, you pay $0. If it is $5,500, you pay $1,500. The unused portion of the rebate is not refundable if your tax is under $4,000.

Toronto municipal land transfer tax

If you are buying in Toronto, an additional municipal land transfer tax applies at roughly the same rates as the provincial tax. This effectively doubles the land transfer tax for Toronto purchases. On a $700,000 home, the combined provincial and municipal land transfer tax would be approximately $20,950 — nearly double the provincial-only amount for Burlington. Toronto also offers a first-time buyer rebate of up to $4,475 on the municipal portion, meaning eligible Toronto first-time buyers can claim rebates totaling up to $8,475 ($4,000 provincial + $4,475 municipal).

Other exemptions and special cases

Land transfer tax exemptions exist for several situations beyond first-time buyer rebates. Transfers between spouses (including common-law partners) are fully exempt. Transfers as part of a divorce or separation settlement may qualify for exemption. Inherited properties transferred through an estate are generally exempt. Certain farm property transfers between family members may qualify. New home buyers may qualify for a rebate on the GST/HST portion of their purchase. If any of these situations apply to you, inform your lawyer so they can ensure the correct exemptions are applied at closing.

Land transfer tax for different property types

The same provincial rates apply to all residential property types — single-family homes, condominiums, townhouses, and multi-unit properties up to 2 units. For properties with 3+ units (triplexes, fourplexes), commercial rates may apply, which differ from residential rates. Your lawyer can confirm the applicable rate based on the property's classification. For newly constructed homes, the land transfer tax is calculated on the total purchase price including HST, unless the HST is rebated at closing.