First-Time Buyer Land Transfer Tax in Ontario Explained
Ontario charges land transfer tax on every home purchase, and it is due on closing day when your deed is registered. Eligible first-time buyers get a refund of up to $4,000 on the provincial tax. That covers the full tax on homes priced up to about $368,333. Above that price you pay the difference. On a $600,000 home outside Toronto, the provincial tax is $8,475, so a first-time buyer pays $4,475 after the refund.
Buying in Toronto adds a second, municipal land transfer tax. First-time buyers there can also claim a city rebate of up to $4,475. On the same $600,000 home, a Toronto first-time buyer pays $8,475 in total instead of $16,950.
In most purchases you never file anything yourself. Your real estate lawyer claims the refund electronically when the transfer is registered, so the reduced amount is what you pay on closing day.
Ontario Land Transfer Tax Rates
The provincial tax is graduated. Each portion of the purchase price is taxed at its own rate, the same way income tax brackets work.
| Portion of purchase price | Rate |
|---|---|
| Up to and including $55,000 | 0.5% |
| $55,000.01 to $250,000 | 1.0% |
| $250,000.01 to $400,000 | 1.5% |
| $400,000.01 to $2,000,000 | 2.0% |
| Over $2,000,000 (one or two single-family residences) | 2.5% |
The tax is triggered by registration, so it is paid on closing day, not after. Your lawyer collects the funds from you before closing and pays the tax when the deed is registered. The Ontario government’s calculation guide shows the same brackets with its own worked example.
Worked Example: A $600,000 First Home
| Item | Outside Toronto | In Toronto |
|---|---|---|
| Provincial land transfer tax | $8,475 | $8,475 |
| Provincial first-time buyer refund | -$4,000 | -$4,000 |
| Toronto municipal land transfer tax | Not applicable | $8,475 |
| Toronto first-time buyer rebate | Not applicable | -$4,475 |
| Total land transfer tax payable | $4,475 | $8,475 |
How the provincial figure is built: $275 on the first $55,000, $1,950 on the next $195,000, $2,250 on the next $150,000 and $4,000 on the remaining $200,000.
Toronto’s municipal tax uses the same brackets as the province up to $2 million, with higher municipal rates on homes over $3 million. The Toronto rebate fully covers the municipal tax on homes up to $400,000.
Who Qualifies for the First-Time Buyer Refund
To claim the provincial refund, all of the following must be true:
- You are at least 18 years old.
- You have never owned a home, or an interest in a home, anywhere in the world.
- Your spouse did not own a home anywhere in the world while they were your spouse.
- You are a Canadian citizen or permanent resident.
- You move into the home as your principal residence within nine months of the transfer.
The City of Toronto rebate uses very similar conditions, so most buyers who qualify for one qualify for both.
Situations that change the amount
- Buying with someone who has owned before. The refund is reduced to the share of the home held by the first-time buyer. A first-time buyer who takes 50% with a parent who already owns a home gets up to half the refund.
- A home you inherited or were given. Any past ownership interest counts, however you got it. Once you have owned a home, you no longer qualify.
- New builds and condos. The refund applies to newly built and resale homes, including condominiums, as long as you live there within nine months.
Spousal history, past part-ownership and property held in trust are the cases most likely to need a closer look. Raise them with your lawyer before you sign the agreement of purchase and sale.
How the Refund Is Claimed
Ontario registers real estate electronically. When your lawyer registers the transfer, they submit the first-time buyer statements with it and the refund is applied right away, so you pay the net tax on closing day. You sign a statement confirming your eligibility, and the province can reassess the refund if a statement turns out to be wrong.
If the refund was not claimed at registration, you can apply to the Ministry of Finance yourself within 18 months of the registration date. The province’s first-time homebuyer refund page lists the forms and full rules.
Land Transfer Tax Is One Line in Your Closing Budget
Land transfer tax is a government tax that passes through your lawyer’s trust account. It is separate from the lawyer’s fee and from disbursements, which are amounts your lawyer pays to third parties on your behalf. All three are due on or before closing day.
| Cost | What it is | When it is paid |
|---|---|---|
| Land transfer tax (net of refund) | Provincial tax, plus municipal tax in Toronto | At registration on closing day |
| Disbursements | Title search, registration fees, title insurance, searches, e-signing and ID verification charges | Collected before closing, paid as the file proceeds |
| Legal fee and HST | Your lawyer’s work: reviewing the agreement, meeting lender requirements, registering the deed and mortgage | Collected before closing |
Buyers who plan only for the down payment are often caught out by this mix. Our guide on how to avoid hidden home-buying costs walks through the other items, from mortgage insurance to home inspections.
When you compare lawyers, ask whether each quote lists the fee, disbursements, HST and land transfer tax as separate lines. A fixed-fee real estate lawyer for first-time buyers can tell you what the fee covers before you commit, and this overview of Ontario real estate law firms that offer flat-rate fees explains what a flat rate usually includes.
Know Your Number Before You Make an Offer
Your land transfer tax is one of the few closing costs you can calculate to the dollar before you buy. RealEstateLawyers.ca LLP can confirm whether you qualify for the provincial refund and the Toronto rebate, then send an itemized quote that shows your land transfer tax, legal fee, disbursements and HST as separate lines. Request your quote and take the guesswork out of closing day.
Frequently Asked Questions
Can a first-time buyer avoid all land transfer tax in Ontario?
Only on lower-priced homes. The $4,000 provincial refund covers the full tax on homes up to about $368,333. In Toronto, the $4,475 city rebate covers the full municipal tax on homes up to $400,000. Above those prices, you pay the balance.
Does the seller pay land transfer tax in Ontario?
No. Land transfer tax is the buyer’s cost and is paid when the transfer is registered in the buyer’s name.
I am buying with someone who has owned a home before. Do I still get the refund?
You can, but the refund is reduced to match your share of the home. Your co-buyer’s share does not qualify.
What if my lawyer did not claim the refund at closing?
You can apply directly to the Ontario Ministry of Finance within 18 months of the registration date.
Can a fixed-fee lawyer claim the refund on a remote closing?
Yes. The refund is claimed as part of electronic registration, so it works the same whether you sign in person or remotely. Ask for a quote that shows the land transfer tax and refund separately from the legal fee.
This article provides general information only and is not legal advice. Tax rates, refunds and rebates are current as of October 12, 2026 and can change. For advice about your purchase, speak with a lawyer.
