Buying a luxury home in Toronto? Before you sign, make sure you understand the land transfer taxes that are due at closing. For multi‑million‑dollar purchases, these taxes can be a six‑figure line item that affects your cash flow and financing. You want clarity, not surprises, when the solicitor requests funds.

In this guide, you’ll learn how Toronto’s two land transfer taxes work, what you can expect to pay at higher price points, which exemptions or rebates might apply, and how to plan your transaction like a pro. You’ll also get a practical checklist you can use with your lawyer and financial advisor. Let’s dive in.

How land transfer tax works in Toronto

When you buy residential property in Toronto, you pay two separate transfer taxes:

• The Ontario Land Transfer Tax (provincial)
• The City of Toronto Municipal Land Transfer Tax (municipal)

Both taxes generally use the purchase price as the tax base and are calculated on a progressive, tiered schedule. Your lawyer calculates the taxes using the signed agreement, then collects and remits them on your behalf at closing. Failure to pay can lead to penalties and interest.

The taxes are structured as marginal rates applied to portions of the price that fall within each bracket. You do not pay a single flat percentage on the entire purchase price. Instead, you add the tax from each bracket to reach the total. In Toronto, you pay the sum of the provincial tax and the municipal tax on closing day.

Rate brackets you should know

The following bracketed schedule reflects the commonly applied structure in effect as of mid‑2024. Both the Ontario LTT and the Toronto MLTT use the same tiers, and you pay both.

• 0.50% on the first $55,000
• 1.00% on the portion from $55,000 to $250,000
• 1.50% on the portion from $250,000 to $400,000
• 2.00% on the portion from $400,000 to $2,000,000
• 2.50% on the portion above $2,000,000

These rates are applied separately for the province and the city. The combined amount is due at closing and is typically funded alongside your down payment and other closing costs. Lenders expect you to have cash available for this obligation, so build it into your plan early.

Luxury price examples (Toronto)

Below are illustrative examples using the mid‑2024 brackets. Each example shows the provincial tax, the municipal tax, and the combined total you would pay in Toronto.

Example: $1,000,000 purchase

• Provincial LTT:
  • 0.5% × $55,000 = $275
  • 1% × $195,000 = $1,950
  • 1.5% × $150,000 = $2,250
  • 2% × $600,000 = $12,000
  • Provincial total = $16,475
• Municipal MLTT (same bracket amounts) = $16,475
• Combined LTT at closing = $32,950

Example: $3,000,000 purchase

• Provincial LTT:
  • 0.5% × $55,000 = $275
  • 1% × $195,000 = $1,950
  • 1.5% × $150,000 = $2,250
  • 2% × $1,600,000 = $32,000
  • 2.5% × $1,000,000 = $25,000
  • Provincial total = $61,475
• Municipal MLTT = $61,475
• Combined LTT at closing = $122,950

Example: $10,000,000 purchase

• Provincial LTT:
  • 0.5% × $55,000 = $275
  • 1% × $195,000 = $1,950
  • 1.5% × $150,000 = $2,250
  • 2% × $1,600,000 = $32,000
  • 2.5% × $8,000,000 = $200,000
  • Provincial total = $236,475
• Municipal MLTT = $236,475
• Combined LTT at closing = $472,950

For estate‑level purchases, the combined taxes can easily reach the six‑figure range. Plan for this early so it never becomes a last‑minute scramble.

Other taxes that may apply

HST on new builds and assignments

HST applies to newly constructed homes and certain assignment transactions. Builder incentives and HST rebates may affect your net cost, but they do not eliminate land transfer tax. LTT remains payable on the transfer of the property.

Non‑Resident Speculation Tax (NRST)

If you are a non‑resident of Canada or purchasing through certain foreign entities, a separate surcharge may apply in addition to LTT. This surcharge is calculated as a percentage of the purchase price and can be material. Rates and scope have changed over time, so confirm the current rules with your counsel.

Post‑purchase municipal levies

Annual municipal programs, such as Toronto’s Vacant Home Tax, are separate from LTT. They do not affect the tax due at closing but should be considered in ownership planning if applicable to your property’s use.

Exemptions, rebates and special rules

First‑time homebuyer rebates

Ontario offers a provincial rebate for qualifying first‑time buyers, and the City of Toronto offers a separate municipal rebate. Eligibility depends on specific criteria such as residency, prior ownership, and principal residence use. These rebates are more common in entry‑level transactions, but if you qualify, your lawyer can help apply the rebate at closing or by refund application.

Family, estate and charitable transfers

Certain transfers between spouses, transfers on death, some family rollovers, and certain transfers to or from registered charities or prescribed public bodies may be exempt or eligible for rollover relief. Documentation and statutory definitions control eligibility, so coordinate with your lawyer well in advance.

Refunds and timing

If you qualify for a rebate, you or your lawyer must apply and provide supporting declarations. Refunds are not automatic. Expect to sign statutory declarations at closing, and be accurate. Misstatements can lead to penalties or loss of eligibility.

Planning moves for luxury buyers

Budget and liquidity

• Build the combined provincial and municipal LTT into your first budget draft and discuss it with your lender.
• Confirm which funds your lender expects you to provide at closing versus what is covered by mortgage proceeds.

Ownership structure and privacy

• Purchasing through a corporation or trust can offer estate planning, privacy, or asset protection benefits. It can also change tax reporting and compliance requirements.
• Anti‑avoidance and disclosure rules are active in this area. Seek legal and tax advice before you structure.

Share purchase vs asset purchase

• Buying shares of a company that owns the real estate can, in some cases, alter the timing or applicability of land transfer tax.
• There are tradeoffs involving financing, tax consequences, and anti‑avoidance scrutiny. Assess these with your legal and accounting team before making offers.

New builds and pre‑construction

• HST and LTT interact differently on builder deals and assignments.
• Builders may support HST rebates, but LTT is still due when title transfers. Model your net outlay clearly before you firm up.

Multi‑parcel or staged acquisitions

• Estate buyers acquiring multiple parcels or planning staged ownership changes should analyze the cumulative tax impact.
• Artificial staging intended purely to reduce tax can be challenged under anti‑avoidance rules.

Documentation and declarations

• Expect residency, first‑time buyer, and other declarations at closing.
• Keep supporting documents ready and ensure your advisors coordinate the filing.

Quick checklist before you bid

• Confirm the current Ontario LTT and Toronto MLTT brackets and any recent changes.
• Estimate your combined LTT using the tiered schedule and price range you’re targeting.
• Discuss LTT funding with your lender and lawyer so closing day is fully funded.
• If you are a non‑resident or using a foreign entity, confirm NRST exposure and any potential refunds or exemptions.
• For new builds or assignments, map out HST, LTT, and available rebates with your builder and counsel.
• If you might qualify for first‑time buyer rebates, verify eligibility and prepare documentation early.
• Engage a Toronto real estate lawyer and a tax advisor experienced in high‑value and cross‑border transactions.

Why work with a boutique luxury advisor

At the top of the market, execution matters. You want a senior‑led team that anticipates closing costs, coordinates with your legal and tax advisors, and protects your position in negotiations. Genereaux & Associates pairs concierge service with international reach to help you acquire or divest luxury property with confidence, discretion, and speed.

If you are evaluating a purchase in Toronto or across the West GTA, let’s talk through your numbers and structure early. For a private consultation, connect with John Genereaux.

FAQs

Who pays land transfer tax in Toronto home purchases?

• The buyer is typically responsible for both the Ontario LTT and the Toronto MLTT, which are due at closing unless the parties agree otherwise in the contract.

When is land transfer tax collected and who remits it?

• Your lawyer calculates the amount from the purchase agreement and remits the taxes on your behalf at closing using funds you provide.

Do luxury condo purchases follow the same LTT rules?

• Yes. The same provincial and municipal land transfer taxes apply to condos and freehold homes; for new condos, HST is a separate consideration.

Are there payment plans for large land transfer tax bills?

• No. LTT must be paid in full at closing. There is no routine instalment option.

Can the seller cover my land transfer tax to reduce my cost?

• Sellers are not required to pay the buyer’s LTT. You can negotiate closing costs, but you should plan to fund the taxes yourself.

Does LTT apply to mortgages or refinancing transactions?

• Generally no. LTT is a tax on transfers of land, not on mortgage financing. Complex title transfers may have other costs, so confirm with your lawyer.

Do first‑time buyer rebates matter for high‑end purchases?

• They can if you qualify, but eligibility criteria are strict and the rebate amounts are capped. Your lawyer can confirm eligibility and handle the application.

Can I avoid LTT by buying through a foreign company or trust?

• Attempts to avoid LTT through foreign entities can trigger surcharges, anti‑avoidance rules, added taxes, and tougher financing. Obtain legal and tax advice before structuring.