Toronto Land Transfer Tax on Luxury Homes: Worked Examples

The short answer: a standard Toronto home purchase attracts Ontario land transfer tax and Toronto municipal land transfer tax. Before rebates, fees or foreign-buyer taxes, the combined bill is $157,450 on a $3,500,000 house and $361,450 on a $6,000,000 house, about 6% of the price. Budget for payment at registration on closing.

Since April 1, 2026, Toronto's municipal tax rises in steps above $3 million. That changes the closing-cost budget for a luxury purchase. Below I walk through how each tax is calculated, the full math on two example homes, what first-time buyers get back, and when the money leaves your account.

Land transfer tax (LTT) is a transaction tax generally payable when land is acquired, subject to exemptions. Across Ontario, it includes the provincial land transfer tax. Inside the City of Toronto, buyers also pay the Municipal Land Transfer Tax (MLTT), which the City has charged on top of the provincial tax since February 1, 2008.

Both taxes are calculated on the "value of the consideration." For a typical purchase, that starts with the price. Ontario says it includes the purchase price, liabilities you assume, soft costs and the cost of upgrades. HST paid on the purchase price is excluded: Ontario states that LTT does not apply to the HST paid on a purchase price.

HST embedded in soft costs is generally included in the tax base. Ask your lawyer to check the statement of adjustments rather than simply removing HST from every charge.

How is Ontario land transfer tax calculated?

The provincial tax is marginal, like income tax. Each rate applies only to the slice of the price inside its bracket. For a property with one or two single-family homes, the Ontario rates below apply to agreements signed after November 14, 2016:

• 0.5% on the first $55,000
• 1.0% from $55,000 to $250,000
• 1.5% from $250,000 to $400,000
• 2.0% from $400,000 to $2,000,000
• 2.5% on everything above $2,000,000

Ontario publishes a shortcut for homes above $2 million: multiply the price by 2.5%, then subtract $13,525. On a $3,500,000 home that gives $87,500 minus $13,525, or $73,975. The provincial schedule stops at 2.5%, so above $2 million the provincial cost rises in a straight line.

How do Toronto's luxury MLTT tiers work above $3 million?

Up to $3 million, Toronto's brackets mirror Ontario's. Above that, the City adds five luxury tiers. City Council approved higher rates for these tiers on December 17, 2025, and the new rates took effect April 1, 2026:

• 4.40% from $3,000,000 to $4,000,000
• 5.45% from $4,000,000 to $5,000,000
• 6.50% from $5,000,000 to $10,000,000
• 7.55% from $10,000,000 to $20,000,000
• 8.60% above $20,000,000

These are also marginal rates. The amending by-law applies each rate only to the value "which exceeds" the lower threshold. For comparison, the rates in force up to March 31, 2026 ran from 3.5% to 7.5% on the same tiers, so each tier rose by roughly one percentage point.

A key distinction: the luxury tiers apply only to property with one or two single-family residences. Other property types, such as a larger multi-residential building, stay on the flat 2.0% top MLTT rate above $400,000.

What is the land transfer tax on a $3.5 million and a $6 million home?

Here is the full calculation on two hypothetical Toronto homes, using rates in force on June 9, 2026. Each price is the taxable consideration for land containing one or two single-family residences, with an agreement signed after November 14, 2016. The totals exclude rebates, administration fees and any foreign-buyer taxes.

Two things stand out. On the $6 million home, Toronto's tax is about 65% higher than the provincial tax. And at that price, every additional dollar of purchase price attracts 9% in combined transfer tax (2.5% provincial plus 6.5% municipal). Under the pre-April rates, the same $6 million purchase carried $196,475 in MLTT, so the change added $28,500.

Do first-time buyers get a land transfer tax refund in Toronto?

Yes, but at this price point it is modest. Ontario's first-time homebuyer refund is capped at $4,000. Toronto's first-time purchaser rebate is capped at $4,475. Together that is $8,475, which would bring the $3,500,000 example down to $148,975.

The rules are strict. The buyer must be at least 18, must move in as a principal residence within nine months, and can never have owned a home, or an interest in one, anywhere in the world. A spouse's ownership during the relationship also counts against you.

Both programs require Canadian citizenship or permanent residence, with an 18-month window to qualify after closing.

If a non-qualifying parent acquires a beneficial ownership share, Ontario reduces the refund in proportion to the qualifying buyer's share. A parent on title solely as trustee may be treated differently if the trust is documented.

You can claim at registration, or apply afterward within 18 months. Toronto charges a $221.22 fee for a rebate requested after electronic registration.

When is land transfer tax paid?

For a standard registered purchase, budget for both taxes at closing. Toronto's by-law requires payment "when the conveyance is tendered for registration or before."

For an electronic closing, arrange the tax funds with your lawyer before registration. Toronto's payment guidance distinguishes Teranet collection from other payment methods. Toronto also charges a $102.56 administration fee plus HST per transaction.

Three timing points matter for my pre-construction and assignment clients:

• The registration date sets the Toronto MLTT rate. Toronto's new rates apply to transfers registered on or after April 1, 2026, even if the agreement was signed earlier.
• Assignments are taxed on the full cost. On an assigned agreement, the tax base includes the assignment payment plus the original price and extras.
• Upgrades count. On a new home, upgrades and extras form part of the value, excluding HST paid on the purchase price.

A separate caveat: foreign buyers may also owe Ontario's 25% Non-Resident Speculation Tax and Toronto's 10% Municipal Non-Resident Speculation Tax, on certain residential purchases, in addition to ordinary transfer taxes. Eligibility, exemptions and transitional rules matter. Anyone in that position should speak with a lawyer before signing.

What this means for you

Luxury buyers: Budget ordinary transfer tax as a cash closing cost of about 4.5% to 6% of price in the $3.5 million to $6 million range. If you are choosing between a $4.9 million and a $5.2 million house, the extra $300,000 attracts about $26,000 in transfer tax. My notes on upsizing from condo to freehold cover the wider trade-off.

Investors and pre-construction buyers: check whether your closing falls after April 1, 2026 and whether the unit is a single-family residence for tax purposes. Assignment pricing should net out the buyer's full transfer tax. I covered the broader picture in pre-construction in 2026 and Ontario HST policy.

Rental owners: the luxury tiers, and Ontario's 2.5% bracket, apply only to land with one or two single-family residences. A larger purpose-built rental is generally taxed at a top rate of 2.0% provincially and 2.0% municipally. Confirm the classification with your lawyer early, especially on mixed-use or partially residential properties.

Frequently asked questions

Is HST included when calculating land transfer tax?

Ontario excludes HST paid on the purchase price from the value of the consideration. Soft costs and upgrades on a new home are included; HST embedded in soft costs is generally included too.

Is the 6.5% Toronto rate charged on the whole price of a $6 million home?

No. Each rate applies only to the portion of the price inside its band, so 6.5% applies to the slice between $5 million and $6 million.

Does the new Toronto rate apply if I signed before April 1, 2026?

Yes, if the transfer is registered on or after April 1, 2026. The City's by-law ties the rate to the registration date, not the agreement date.

Do buyers outside Toronto pay the luxury tiers?

No. The MLTT applies only to property within the City of Toronto. Elsewhere in Ontario, the ordinary land transfer tax is provincial; NRST may also apply.

Sources

• Calculating Land Transfer Tax, Government of Ontario, Ministry of Finance
• Land Transfer Tax Refunds for First-Time Homebuyers, Government of Ontario, Ministry of Finance
• Determining the Value of the Consideration for Transfers of New Homes, Government of Ontario, Ministry of Finance
• Municipal Land Transfer Tax and Municipal Non-Resident Speculation Tax Rates and Fees, City of Toronto
• Municipal Land Transfer Tax Historical Rates, City of Toronto
• Municipal Land Transfer Tax Rebate Opportunities, City of Toronto
• By-law 132-2026, enacted February 10, 2026, amending Municipal Code Chapter 760, City of Toronto
• Non-Resident Speculation Tax, Government of Ontario, Ministry of Finance
• MLTT Resources for Lawyers, City of Toronto