Toronto & Ontario Land Transfer Tax + Closing Costs Guide

Toronto & Ontario Land Transfer Tax + Closing Costs Guide

Closing costs catch many Toronto buyers off guard — and the single biggest reason is land transfer tax. Unlike almost anywhere else in Ontario, buying in the City of Toronto means paying both a provincial land transfer tax (LTT) and a separate City of Toronto municipal land transfer tax (MLTT) on the same purchase. This guide breaks down what Toronto (416) buyers actually owe at closing, the first-time buyer rebates that can offset land transfer tax, and the other costs — legal fees, title insurance, inspections, and Tarion registration for new builds — that belong in your closing budget.

Why Toronto Buyers Pay Two Land Transfer Taxes

Every property purchase in Ontario triggers the provincial land transfer tax. But the City of Toronto is the only municipality in the province that layers its own municipal land transfer tax (MLTT) on top — a 416-specific cost that buyers moving from the 905 GTA or elsewhere in Ontario often don't anticipate.

• Structure: the Toronto MLTT mirrors Ontario's provincial LTT bracket structure for properties up to $3,000,000. Above $3 million, higher marginal rates apply, with revised rates effective April 1, 2026.

• Practical effect: because the two taxes largely mirror each other up to the $3 million mark, a Toronto buyer pays roughly double the land transfer tax of an equivalent purchase in the 905 — both taxes are calculated on the same purchase price and added together at closing.

• When it's due: land transfer tax is paid in full on closing day, typically through your real estate lawyer as part of the closing funds — it is not financed into your mortgage.

This is the single most underestimated 416-specific closing cost. Buyers budgeting only for a single land transfer tax bill — as is common in most of Ontario — can be caught short by tens of thousands of dollars on a typical Toronto purchase.

First-Time Buyer Rebates

If you qualify as a first-time buyer, both levels of land transfer tax offer a rebate that can significantly reduce — or in some cases eliminate — what you owe at closing.

• Ontario LTT rebate: up to $4,000 against the provincial tax owing.

• Toronto MLTT rebate: up to $4,475, which covers the full municipal tax on homes priced at $400,000 or less.

• Combined maximum: up to $8,475 when both rebates apply — generally credited directly at closing by your lawyer rather than requiring a separate refund application.

For the full eligibility rules around what counts as a "first-time buyer" for these rebates, see our dedicated First-Time Home Buyer Incentives Guide — the figures there are consistent with this guide.

Other Closing Costs to Budget For

Land transfer tax is usually the largest single closing cost in Toronto, but it's far from the only one. A realistic closing budget should include:

• Legal fees: your real estate lawyer handles title searches, the closing itself, mortgage registration, and disbursements. Costs vary by firm and transaction complexity.

• Title insurance: a one-time premium that protects against title defects, fraud, and certain survey issues — typically arranged through your lawyer.

• Home inspection: for resale purchases, a professional inspection before firming up your offer (where conditions allow) or before closing helps surface issues with the property's condition.

• Tarion deposit registration (new builds only): if you're buying a new construction home or condo, buyers purchasing on or after January 1, 2026 must register with Tarion within 45 days of the transaction to preserve maximum deposit protection coverage. This is a narrow but important deadline — missing it can jeopardize your deposit protection.

• Adjustments: reimbursements to the seller for prepaid property taxes, utilities, or condo fees calculated as of the closing date.

• Moving and incidental costs: movers, utility hookups, and incidentals that aren't part of the real estate transaction itself but still hit your budget around closing.

Buyers purchasing pre-construction should also review our dedicated pre-construction resources for builder-specific deposit structures and Tarion details, since new-build closing costs can differ meaningfully from resale.

Building a Realistic Closing Budget

Because land transfer tax alone can represent more than half of a typical Toronto buyer's total closing costs, it deserves the most attention when you're budgeting — but it shouldn't be the only line item you plan for. A common mistake is treating closing costs as an afterthought to the down payment, when in reality they are a separate pool of cash you need available on closing day, on top of your down payment and any moving expenses. Speak with your real estate lawyer early in the process so they can give you a written estimate of statement of adjustments and closing costs specific to your purchase price and property type, rather than relying on general percentages.

Illustrative percentages only, not guaranteed amounts. Actual closing costs vary by purchase price, property type, and individual circumstances — confirm exact figures with your real estate lawyer.

Closing Cost Checklist

Frequently Asked Questions

Why does Toronto have two land transfer taxes when the rest of Ontario only has one?

The City of Toronto has authority, unique among Ontario municipalities, to levy its own municipal land transfer tax in addition to the province's tax. The Toronto MLTT mirrors the provincial bracket structure up to $3,000,000, with higher marginal rates above that threshold effective April 1, 2026.

Can I roll land transfer tax into my mortgage?

Generally no. Land transfer tax is due in cash (or certified funds) at closing as part of your closing costs, separate from your mortgage financing. Budget for it as an out-of-pocket cost alongside your down payment.

Do first-time buyer rebates apply automatically?

No — your real estate lawyer typically applies for both the Ontario and Toronto rebates on your behalf at closing, provided you meet the eligibility criteria. Confirm with your lawyer that both rebates have been claimed if you qualify.

What's the most commonly forgotten closing cost in Toronto?

Beyond land transfer tax itself, buyers most often underbudget for tax/utility adjustments and, for new-build purchases, the Tarion registration deadline — missing the 45-day window can affect deposit protection.

This guide is for general informational purposes and does not constitute legal, financial, or tax advice. Always confirm current rates and rules with a licensed mortgage professional, accountant, or real estate lawyer before making a decision.

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For personalized advice on your specific Toronto buying or selling situation, contact Frank Merigliano and the VIP Condos Toronto team directly:

• Phone: 416-885-0172

• Email: frank@vipcondostoronto.net

• Web: www.VIPCondosToronto.net

Frank Merigliano, Team Leader / Sales Representative, VIP Condos Toronto, RE/MAX PREMIER INTERNATIONAL INC., Brokerage — licensed since 1993, with RE/MAX since 1995, and a Top 50 RE/MAX team in Canada since 2015.