When buying a home, many people overlook the significant cost of land transfer tax. When you acquire a property (and the land it rests on), you must pay a tax to the government after the transaction closes. The amount paid depends on the value of your property.
Our calculator shows you how much you can expect to pay and why. The Land Transfer Tax cost will be uniform accross Ontario except for Toronto and Toronto's surrounding regions including North York, Etobicoke and Scarborough. See below for more details.
Introduced to Ontario in 1974, the Conservative ontario government presented the provincial Land Transfer Tax to property buyers with a starting percentage of 0.3% for up to $35,000 of the purchase price of property and 0.6% for the rest. In 2008, a municipal Land Transfer Tax was introduced in addition to the provincial one to home buyers in Toronto and a Non-Resident Speculation Tax became effective for the Greater Golden Horseshoe Region in 2017. Ontario’s Land Transfer Tax rates were last updated in 2017.
|Purchase Price of Home||Land Transfer Marginal Tax Fee|
|$55,000 to $250,000||1.0%|
|$250,000 to $400,000||1.5%|
|$400,000 to $2,000,000||2.0%|
|Purchase Price of Home||First-Time Buyer Rebate|
|Up to $368,333||Full Tax Refund|
|Over $368,333||$4,000 Refund|
To offset the negative effects of the large amount of tax, the government doubled the refund for first-time home buyers in 2017. For move-ins that occurred prior to 2017, the refund returns the full value of the tax up to a maximum of $2,000. For move-ins after 2017, and the buyer would be exempt from paying tax on the first $368,000 of the purchase price and can receive $4,000 on the remainder. To qualify:
You must apply for the refund within 18 months of purchasing the property.
Toronto currently has the highest Land Transfer Tax rates in Canada. Since 1974, the cost grew seven times faster than the increase in house prices themselves and now cost an average of $20,000. On top of the provincial tax, Toronto home buyers within the area encircled by Etobicoke, Steeles Avenue, Scarborough, and Lake Ontario also have to pay a municipal tax that is equal to the Ontario tax rates. To account for the additional cost, first-time home buyers can receive a rebate of up to $4,475.
The Non-Resident Speculation Tax (NRST) is a 15% tax payable by home buyers who are not citizens or permanent residents of Canada or are foreign corporations or trustees if they purchase a property in the Greater Golden Horseshoe Region. The NRST applies to residential property which contains at least one and not more than six single family residences.
Visit our Canada Land Transfer Tax page to find out more information about land transfer and other taxes accross Canada.