What are land transfer taxes?
What are land transfer taxes and why can they cost you thousands? Read this and stop guessing.
Quick answer
Land transfer tax (LTT) is a one-time tax the buyer pays when property ownership transfers. It’s calculated on the purchase price and is due at closing. Different provinces and some cities add extra municipal LTT. First-time buyer rebates and exemptions may reduce or remove the cost.
What land transfer tax means
- It’s a buyer’s tax, not a seller’s tax.
- It applies to residential and commercial property transfers.
- Rates and rules vary by province and municipality.
How it’s calculated (simple math)
Calculation uses price bands and percentages. Example (Ontario rates, subject to change):
- 0.5% on the first $55,000
- 1.0% on the next portion up to $250,000
- 1.5% up to $400,000
- 2.0% up to $2,000,000
- 2.5% on the portion above $2,000,000
Example: Buying at $800,000 — you pay layered percentages on each bracket, not a flat rate. Use a land transfer tax calculator for exact totals.
Who pays and when
- Buyer is responsible. Your lawyer or notary typically pays on your behalf at closing.
- You must have funds ready at closing for LTT plus closing costs.
Common rebates and exemptions
- First-time home buyer rebates (provincial, and sometimes municipal) reduce or eliminate LTT for eligible buyers.
- New home rebates may apply for certain newly built homes.
- Transfers between spouses or certain family transfers can be exempt.
- Always confirm eligibility and apply before closing.
How to reduce surprises
- Use a land transfer tax calculator early in your budget.
- Ask your realtor or lawyer to estimate LTT in writing.
- Check first-time buyer rebate rules and file paperwork early.
- Consider total closing funds, not just mortgage pre-approval.
Red flags to watch for
- Assuming LTT is included in mortgage approval.
- Forgetting municipal LTT in cities that charge it (for example: Toronto).
- Not confirming rebate eligibility before closing.
Why work with a local expert
A local realtor and a real estate lawyer save you time and money. They know current rates, municipal rules, rebate details, and paperwork deadlines. That prevents last-minute funding gaps and costly mistakes.
Want a precise LTT estimate for your property and a checklist for closing? Contact the local realtor who handles complex transfers and first-time buyer claims quickly and clearly.
Email: tony@sousasells.ca
Phone: 416-477-2620
Website: https://www.sousasells.ca
Be prepared. Know the tax. Close the deal with confidence.
