Ontario land transfer tax is calculated using graduated rates applied to the value of the consideration for a property transfer. For residential transfers under the current structure, rates range from 0.5% on the first portion to 2.5% on the portion above $2 million for land containing one or two single-family residences. Eligible first-time buyers may receive an Ontario refund of up to $4,000.
Key Takeaways
- Ontario LTT uses graduated rates — different portions of the price are taxed at different percentages.
- The tax is calculated on the value of the consideration for the transfer.
- Eligible first-time buyers can receive a refund of up to $4,000.
- Toronto applies its own separate municipal land transfer tax on top of Ontario's — Mississauga does not.
How the graduated rates work
| Portion of value | Rate |
|---|---|
| Up to and including $55,000 | 0.5% |
| Over $55,000 up to $250,000 | 1.0% |
| Over $250,000 up to $400,000 | 1.5% |
| Over $400,000 | 2.0% |
| Over $2,000,000 (land with one or two single-family residences) | 2.5% |
A worked example
Using Ontario's own illustrative $400,000 example, here's how the tax builds up across the rate bands:
| Portion | Calculation | Amount |
|---|---|---|
| First $55,000 | × 0.5% | $275 |
| Next $195,000 | × 1.0% | $1,950 |
| Next $150,000 | × 1.5% | $2,250 |
| Total | $4,475 |
Note
First-time buyer refund
Eligible first-time purchasers may receive a refund of up to $4,000 on Ontario land transfer tax for qualifying transactions on or after January 1, 2017. Broadly, eligibility involves:
- Being at least 18 years old
- Never having previously owned an eligible home, or an interest in one, anywhere in the world
- Spousal ownership rules, which can affect eligibility
- Intending to occupy the home as your principal residence within nine months of the transfer
- Canadian citizenship or permanent-resident status rules
If the refund isn't claimed at registration, a qualifying application can generally still be made within 18 months.
Toronto has its own additional tax
The City of Toronto applies a separate municipal land transfer tax in addition to Ontario's provincial tax. If you're considering a property in Toronto specifically, that additional municipal tax should be factored in — it's outside the scope of this Ontario-wide overview.
Note
Related Reading
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