How Much Is Land Transfer Tax in Ontario? (And How to Reduce It)

 Buying your first home in Ontario comes with a tax most buyers don’t see coming — land transfer tax. The good news is that first-time buyers can get up to $4,000 back, and in most cases it’s applied right at closing so you never actually pay it out of pocket. This guide explains exactly how the rebate works, who qualifies, and what to expect on a real purchase.

What Is Ontario Land Transfer Tax?

When you buy a home in Ontario, you pay a provincial land transfer tax (LTT) based on the purchase price. It’s one of the largest closing costs most buyers face — and it’s calculated on a sliding scale:

Purchase Price Portion	Tax 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%

So on a $650,000 home, the LTT isn’t just 2% of the whole price — it’s calculated in brackets, similar to income tax.

Ontario’s first-time home buyer land transfer tax rebate covers up to $4,000 of your LTT. That rebate completely eliminates the tax on homes priced up to approximately $368,333. If you’re buying above that, you still get the full $4,000 back — you just pay the portion above it.

What about Toronto?

If you’re buying in the City of Toronto, there’s also a Municipal Land Transfer Tax on top of the provincial one. Toronto has its own first-time buyer rebate of up to $4,475. We don’t work in Toronto, but it’s a common question — worth knowing if you’re considering it.

Do You Qualify?

To receive the Ontario LTT rebate, you must:

• Be a Canadian citizen or permanent resident
• Be 18 years of age or older
• Have never owned a home anywhere in the world — this includes homes outside Canada
• Occupy the home as your principal residence within 9 months of closing

Buying with a partner who previously owned a home?

This is where it gets nuanced. If your spouse or partner has previously owned a home, you don’t automatically lose the full rebate — but your rebate is reduced proportionally based on your ownership share. For example, if you own 50% of the property, you’d receive 50% of the available rebate. Your lawyer handles this calculation at closing.

The Rebate Is Applied at Closing — Not After

Here’s the misconception I hear regularly: buyers think they pay the full land transfer tax and then wait for a government cheque. That’s not how it works.

The rebate is applied at the time of registration, through your real estate lawyer. You only pay what’s left after the rebate is subtracted. There’s no waiting, no application to file after the fact, and no cheque in the mail. Your lawyer simply accounts for it in the closing statement.

This matters for cash flow planning — knowing you won’t need to front that amount and wait to get it back.

Worked Example: $650,000 Home

Let’s run the numbers on a typical Halton Region purchase.

Step 1: Calculate the full LTT

Bracket	Amount	Rate	Tax
First $55,000	$55,000	0.5%	$275
$55,001–$250,000	$195,000	1.0%	$1,950
$250,001–$400,000	$150,000	1.5%	$2,250
$400,001–$650,000	$250,000	2.0%	$5,000
Total LTT			$9,475

Step 2: Apply the first-time buyer rebate

• Rebate applied: $4,000
• LTT owing at closing: $5,475

Without the rebate, you’d owe $9,475. With it, you owe $5,475. That $4,000 stays in your pocket.

Frequently Asked Questions

How much is land transfer tax in Ontario?

Ontario land transfer tax is calculated on a sliding bracket scale: 0.5% on the first $55,000, 1% on $55,001–$250,000, 1.5% on $250,001–$400,000, and 2% on $400,001–$2,000,000. On a $650,000 home, the total LTT works out to $9,475 before any rebate.

Who pays land transfer tax in Ontario — buyer or seller?

The buyer pays land transfer tax in Ontario. It is due at closing and is handled by your real estate lawyer as part of the closing statement. The seller has no obligation to pay it.

Can you avoid land transfer tax in Ontario?

You cannot avoid land transfer tax entirely — it applies to all property transfers in Ontario regardless of price. However, first-time buyers can reduce it significantly. The provincial rebate covers up to $4,000, which means on homes priced up to approximately $368,333, your net LTT owing at closing is $0. Spousal transfers and certain family transfers may also be exempt depending on the specific circumstances — speak with a real estate lawyer if this applies to you.

Is land transfer tax paid at closing or after?

Land transfer tax is paid at closing — on the day your lawyer registers the property transfer. There is no invoice after the fact. Your lawyer includes it in the closing statement and collects it as part of the funds due on possession day.

Do first-time buyers pay land transfer tax in Ontario?

First-time buyers pay land transfer tax but receive a rebate of up to $4,000, applied automatically at closing by their lawyer. On lower-priced homes the rebate can eliminate the tax entirely. On higher-priced homes, you pay only the amount above the rebate threshold.

How is land transfer tax calculated in Ontario?

Ontario LTT is calculated in tax brackets, similar to income tax. Each portion of the purchase price is taxed at a different rate — you don’t pay the highest rate on the full price. Use the calculator above to see the exact breakdown for any purchase price.

Do I have to apply for the first-time buyer rebate separately?

No. Your real estate lawyer applies the rebate automatically during the closing process. You don’t need to file anything with the province after the fact.

What if I owned a home outside Canada years ago — do I still qualify?

No. The Ontario first-time buyer rebate requires that you have never owned a home anywhere in the world. It doesn’t matter how long ago it was or whether it was in Canada.

The Bottom Line

Land transfer tax in Ontario is calculated on brackets — not a flat rate on the full price — and first-time buyers can get up to $4,000 back at closing, applied automatically with no separate application. On homes under ~$368,000, that rebate wipes out the tax entirely. Use the calculator above to see exactly what you’ll owe.