Ontario's land transfer tax (LTT) is paid by the buyer when a property changes hands. It's calculated on the purchase price using marginal rates: each portion of the price falls into a band, and only that portion is taxed at that band's rate.
The brackets for homes
| Portion of the price | Rate | Tax on a full band |
|---|---|---|
| Up to $55,000 | 0.5% | $275 |
| $55,000 to $250,000 | 1.0% | $1,950 |
| $250,000 to $400,000 | 1.5% | $2,250 |
| $400,000 to $2,000,000 | 2.0% | $32,000 |
| Over $2,000,000 | 2.5% | — |
The first three bands add up to $4,475. Above $400,000, a handy shortcut is: tax = 2% × price − $3,525, up to $2 million.
Worked example: $750,000
- First $55,000 × 0.5% = $275
- Next $195,000 × 1% = $1,950
- Next $150,000 × 1.5% = $2,250
- Remaining $350,000 × 2% = $7,000
- Total: $11,475
Who pays, and when
The buyer pays, on closing. Your lawyer calculates the amount, files the land transfer tax affidavit electronically when the deed is registered, and pays the tax from funds you provide. It can't usually be rolled into your mortgage, so budget for it in cash.
Rates differ for other property. The 2.5% top band applies to land with one or two single-family residences. Commercial, larger multi-unit and vacant land are taxed at 2% above $400,000 instead. Your lawyer confirms the category.
Buying in Toronto?
Toronto adds its own municipal land transfer tax with matching brackets up to $2 million, roughly doubling the total. See our Toronto MLTT guide.
New builds and assignments
Land transfer tax applies to new construction too, based on the total price including HST you pay to the builder, less any rebates assigned to the builder. On assignments, the tax is generally calculated on the full consideration, including any assignment fee. Ask your lawyer to confirm the base.
Frequently asked questions
What is the land transfer tax on a $500,000 home in Ontario?
$6,475 before any first-time buyer rebate.
Is Ontario land transfer tax tax-deductible?
Not for a home you live in. For a rental or investment property, it's added to the property's cost base rather than deducted as an expense.
Do I pay land transfer tax when I inherit a house?
Generally not, because there's no purchase. Transfers between spouses and some family transfers can also be exempt. Your lawyer will confirm.
Sources
- Ontario Ministry of Finance, Land transfer tax