Ontario Land Transfer Tax 2025: What Buyers Need to Know
September 15, 2025
Buying a home in Ontario this year isn’t just about the asking price or the mortgage rate you secure. One of the most significant extra costs you’ll face at closing is the Land Transfer Tax. With provincial rates, extra municipal charges in Toronto, and a rebate for first-time buyers, here’s what Ontario property buyers need to know about the 2025 rules.
What Exactly Is the Land Transfer Tax?
In Ontario, whenever you buy a piece of property, you pay a Land Transfer Tax (often shortened to LTT). It’s not optional—it’s built into the closing process and is calculated on the purchase price of the home. Think of it as a provincial levy that gets applied the moment you become the new owner.
For most buyers in today’s Canadian housing market, the amount isn’t small. On a mid-priced home, the bill can run into the tens of thousands. That’s why anyone planning to buy a home should take the tax into account early, not as an afterthought when the lawyer sends you the final numbers.
Ontario’s Tax Rates in 2025
The LTT is structured like income tax, where brackets apply to different slices of the price. Here’s the current setup:
Portion of Purchase Price | Rate |
First $55,000 | 0.5% |
$55,001 – $250,000 | 1.0% |
$250,001 – $400,000 | 1.5% |
$400,001 – $2,000,000 | 2.0% |
Over $2,000,000 (residential 1–2 units) | 2.5% |
To see how this adds up, let’s say you’re buying a $1,000,000 home in Oakville:
0.5% on the first $55,000 = $275
1% on the next $195,000 = $1,950
1.5% on the next $150,000 = $2,250
2% on the last $600,000 = $12,000
Total = $16,475 in provincial land tax.
That number is before you factor in other closing costs. It’s easy to see why people call LTT one of the most significant hidden expenses in the Ontario real estate market.
The Extra Layer: Toronto’s Municipal Tax
Toronto is the only city in Ontario that adds its own Municipal Land Transfer Tax (MLTT) on top of the provincial one. The structure mostly mirrors the provincial brackets, which means buyers in Toronto pay double what someone outside the city would for the same property value.
And that’s not all. In 2024, the city introduced higher brackets for luxury homes. Here’s a look:
Toronto Price Range | Extra Rate |
$3M – $4M | 3.5% |
$4M – $5M | 4.5% |
$5M – $10M | 5.5% |
$10M – $20M | 6.5% |
$20M+ | 7.5% |
So, a $5 million house in Toronto racks up provincial tax, the municipal version at the same base rate, and then these luxury surcharges. The closing costs are eye-watering, and it makes many high-end buyers rethink whether they want to buy inside city limits or look at surrounding areas instead.
First-Time Buyer Refund
Some relief has been built into the system. If you’re a first-time buyer in Ontario, you may qualify for a refund of up to $4,000 on the provincial LTT. That essentially cancels out the tax on a purchase up to around $368,000.
The main conditions are:
You (and your spouse or partner, if you’re buying together) have never owned a home anywhere in the world.
You plan to move into the property as your primary residence.
In today’s housing market, where even condos in many parts of the GTA are priced above $600,000, the rebate doesn’t cover everything, but it does help ease the first step onto the property ladder.
What About Foreign Buyers?
Foreign buyers have faced additional hurdles for a while, and 2025 brought another change. Toronto introduced a 10% tax on foreign purchasers starting January 1. That’s on top of Ontario’s Non-Resident Speculation Tax (NRST), which already adds 25% of the purchase price for non-residents.
That means if a non-resident purchases a $1 million property in Toronto, they’d be looking at:
$16,475 provincial LTT
$16,475 municipal LTT
$250,000 NRST
$100,000 new Toronto foreign buyer tax
That’s nearly $400,000 in taxes, separate from the price of the home. These policies are meant to keep Canadian homes for sale more available to local residents and to reduce speculative buying.
Why It Matters in 2025
The Canadian housing market has been under pressure from higher interest rates and stretched affordability. Yet, demand hasn’t disappeared. Families still need space, downsizers still want condos, and investors still scan listings.
What’s changed is that buyers now pay much closer attention to total costs, not just the listing price. The land tax bill can easily shape whether a deal feels manageable or not. For example:
A $750,000 home in Mississauga → about $11,475 in LTT
A $900,000 condo in Toronto → about $32,950 when you add provincial and municipal taxes together
A $1.2M detached in Oakville → around $20,475 provincial only
Two homes at similar price points in different areas can mean very different final numbers. That often tips the scales when buyers compare neighborhoods.
How Buyers Can Plan Ahead
1. Build Taxes Into Your Budget
Don’t just plan for the down payment and mortgage approval. Add at least 3–5% of the purchase price for closing costs, with LTT being the most significant chunk.
2. Ask About Rebates Early
If you’re a first-time buyer, confirm your eligibility for the refund before closing. Your lawyer can usually process the application right away.
3. Compare Outside Toronto
Toronto’s municipal tax can double your bill. Buyers looking for more value often consider nearby cities like Mississauga, Oakville, or Burlington, where only the provincial tax applies.
4. Stay Updated on Policy
Budgets sometimes bring tweaks to rates or rules. A shift in policy could save or cost you thousands, depending on your timing.
Final Word
Land Transfer Tax may not be as visible as the sticker price on a listing, but for anyone hoping to buy a home in Ontario this year, it’s unavoidable. Between the provincial brackets, Toronto’s municipal add-ons, and extra rules for non-residents, the tax plays a significant role in shaping affordability in the Canadian housing market.
First-time buyers can lean on the rebate for some relief, but everyone else needs to budget realistically. If you’re browsing Canadian homes for sale this year, look beyond the asking price. The land tax is waiting at the finish line, and knowing the numbers upfront is the only way to avoid surprises.
FAQs
Q. What is the Land Transfer Tax in Ontario?
It’s a provincial tax buyers pay when purchasing property. The amount is based on the purchase price, with tiered rates applied to different portions.
Q. Is there an extra tax in Toronto?
Yes. Toronto charges a Municipal Land Transfer Tax (MLTT) on top of the provincial tax. Luxury properties face even higher rates.
Q. How do foreign buyer taxes work in 2025?
Foreign buyers in Ontario pay a 25% Non-Resident Speculation Tax. In Toronto, an additional 10% foreign purchaser tax applies, significantly raising costs.
