Toronto Land Transfer Tax: What Buyers Should Know

The land transfer tax can add tens of thousands of dollars to your closing costs in Toronto. If you are planning to buy in Summerhill, understanding how this tax works helps you set a clear budget and avoid surprises. In this guide, you will learn what you owe, how the tax is calculated, available rebates, and smart planning tips for midtown buyers. Let’s dive in.

What the land transfer tax is

Land transfer tax is a one-time tax charged when title to real property is transferred. In Ontario, you pay a provincial land transfer tax. Because Summerhill is inside the City of Toronto, you also pay a separate municipal land transfer tax from the City. Both are due at closing and are calculated on the same purchase price.

This matters because the combined taxes can be a major line item, especially at Summerhill price points. Your lawyer collects and pays the tax when the transfer is registered. You should plan for this cash expense along with your down payment and other closing costs.

How Toronto calculates the tax

Both the provincial tax and Toronto’s municipal tax use the same tiered structure. Rates apply to portions of the purchase price in each band, then the amounts are added together. The City repeats the same bands and rates, so the combined bill is roughly double the provincial calculation.

Current bands used for residential purchases:

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

How to estimate your total:

1. Calculate the provincial tax by applying each band to your price.
2. Calculate the City of Toronto tax the same way.
3. Add the two results to get the total payable at closing.

Sample costs at Summerhill price points

These examples show how the tax scales as the price increases. Exact figures should be confirmed by your lawyer at the time of closing.

Example: $800,000 purchase

• Provincial LTT: approximately $12,475
• Toronto MLTT: approximately $12,475
• Combined total at closing: approximately $24,950

Example: $1,200,000 purchase

• Provincial LTT: approximately $20,475
• Toronto MLTT: approximately $20,475
• Combined total at closing: approximately $40,950

Example: $2,500,000 purchase

• Provincial LTT: approximately $48,975
• Toronto MLTT: approximately $48,975
• Combined total at closing: approximately $97,950

First-time buyer rebates and common exemptions

There are separate first-time buyer rebate programs for the provincial tax and the City of Toronto tax. If you qualify, these can reduce or eliminate what you owe, up to program limits. Eligibility usually depends on whether you or your spouse have owned a home before, your intent to occupy the property as your principal residence, and other criteria. Your lawyer typically prepares and submits the claim at closing.

For Summerhill buyers, many detached purchases exceed first-time buyer thresholds, so expect a partial rebate at best on higher-priced homes. Condo and smaller home buyers may qualify for fuller relief. Always confirm your eligibility and refund amounts early in the process.

Other situations with different rules or exemptions:

• Spousal transfers or transfers on death may be treated differently.
• Some transfers involving public or charitable bodies are exempt.
• New builds have separate GST/HST considerations and possible new-home rebates. Land transfer tax still applies on most registered transfers.

If you are a non-resident, be aware that separate surcharges have existed in Ontario. Rules and rates have changed over time. Confirm the current requirements with your lawyer or tax advisor.

Who pays and when

You pay land transfer tax at closing when the deed is registered. Your lawyer prepares the tax statements and remits the funds as part of closing. If you are claiming a first-time buyer rebate, your lawyer will usually file the paperwork at or shortly after closing.

Plan to bring these funds in cash to closing. Lenders generally do not include land transfer tax in your mortgage proceeds. If funds are short, registration may be delayed.

Budgeting for Summerhill buyers

Summerhill is a premium midtown neighborhood with many homes trading above $1 million. That means the tax can significantly increase the cash you need at closing. Add the combined provincial and municipal amounts to your budget as soon as you set your price range.

Property type also affects the tax. Condos often fall in lower bands than large detached homes. New construction purchases may involve GST/HST and separate new-home rebates that are distinct from land transfer tax.

Pitfalls to avoid

• Under-budgeting the combined provincial and municipal taxes.
• Assuming you automatically qualify for the first-time buyer rebate without checking the rules.
• Overlooking potential non-resident surcharges and documentation.
• Mixing up land transfer tax with HST on new construction.
• Using an incorrect transfer value, which can lead to reassessment.

Quick buyer checklist

• Offer stage: ask your realtor or lawyer for a land transfer tax estimate and add it to your cash-to-close plan.
• Pre-closing: have your lawyer prepare the tax statements and any first-time buyer rebate forms. Gather required ID and declarations.
• Closing day: confirm the tax was paid and the transfer registered. Keep copies of your receipts and any rebate filings.

Ready to plan your move?

You deserve a clear picture of total costs before you write an offer in Summerhill. If you want a precise estimate for your target address, a strategy to optimize rebates, and a smooth path to closing, connect with Unknown Company. Start your new chapter — Request a home valuation.

FAQs

Do Toronto buyers in Summerhill pay two land transfer taxes?

• Yes. You pay both the Ontario provincial land transfer tax and the City of Toronto municipal land transfer tax on purchases within Toronto.

Who pays land transfer tax in Ontario and when is it due?

• The buyer pays the tax. It is collected at registration and is due at closing when your lawyer registers the transfer.

Are there rebates for first-time home buyers in Toronto?

• Yes. Separate provincial and City of Toronto first-time buyer rebates exist, each with its own eligibility rules and maximum refund amounts. Your lawyer usually applies at closing.

Is HST charged instead of land transfer tax on homes?

• No. Land transfer tax is separate from HST. Resale homes typically do not have HST, while new construction may. LTT still applies to most registered transfers.

Do non-residents pay extra taxes when buying in Toronto?

• Separate non-resident or foreign buyer surcharges have existed in Ontario. Because rules change, confirm current requirements with your lawyer or tax advisor.