Land Transfer Tax in Ontario

Posted on: February 4, 2021

When buyers want to buy a house, they only take down payment into consideration. Unfortunately, they are not aware of the other closing costs such as legal fee, appraisal fee, home inspection fee, land transfer tax and many more. All these costs are 1.5%-3% of the purchase price. In other words, mortgage borrowers should have extra savings to pay these unexpected expenses / fees. In this blog, we would shed light on the Land transfer tax in detail. Also, whether the first-time homebuyer is liable to pay this fee or not?

What is Land Transfer Tax?
If you buy property in Ontario, you will be subject to pay a land transfer tax to the province after the sale closes. Usually, the amount paid for this particular property tax depends on the property price and location of the property. Additionally, the buyer is responsible for paying this tax in Ontario when you purchase a house, not the seller. This tax is paid upfront by the buyer at the time of closing and is a part of closing cost. Please note that this tax does not become a part of your mortgage amount.

Does First-time home buyer pay Land Transfer Tax in Ontario?
As a first-time homebuyer in Ontario, you are eligible to receive a rebate on Land Transfer tax. Please review the requirements below for first time homebuyer rebate.

Requirements for First-time homebuyers’ rebate
• Canadian citizen or Permanent resident
• At least 18 years or older
• After purchasing property, live in it within nine months.
• Never held a property before
• Must apply for the rebate within 18 months of the purchase of the property.
Fortunately, first-time home buyers get an opportunity to receive a rebate of maximum $4,000 on the land transfer tax in Ontario.

First Time Home Buyer Land Transfer Tax Rebate
For example, Ashley is a first-time home buyer looking to buy a house up to $400,000.00 in Brampton. She is liable to pay a Provincial tax of $4,475.00, whereas she is not subject to municipal taxation. As a first-time home buyer, she is eligible for a tax rebate of up to $4,000 and pays a net payable tax of $475.00 ($4,475-$4000).
If she wants to purchase property at the same purchase price in Toronto, the situation gets changed. She would pay provincial tax $4,475 and municipal tax $4,475 as well. She will receive a total of $8,475.00 rebate and will be paying a net payable tax of $475.00. Please refer to our Land Transfer Tax calculator to get more information.

Additional tax for Non-resident-
As of April 21, 2017, buyers who are not deemed Canadian citizens or permanent residents and are purchasing the property located in the Southern Ontario Golden Horseshoe region must pay a 15 percent fee. Under Non-Resident Speculation Tax and the province’s current land transfer tax, this charge applies to international buyers.

Land Transfer tax in Toronto-
Those purchasing real estate in Toronto would have to pay a municipal land transfer tax on top of the provincial tax. The municipal land transfer tax on real estate transactions in Toronto, first introduced in 2007 and enforced in 2008, has been increasingly used as part of the city’s finances.

Therefore, before purchasing a house, make sure you have additional savings to get the house keys. We would recommend buyers to talk to mortgage professionals to get an idea how much they would pay for the land transfer tax or how much rebate they are eligible for if they are first-time home buyers. Be sure you are prudently considering all the costs and spending judiciously to be in your budget. At MB Mortgages, we are mortgage professionals with more than a decade experience who can diligently walk you through the whole process and help make your dream come true to be a homeowner.

Why choose us-
As a leading Mortgage Brokerage, we have strong relations with multiple banks and numerous lenders. We work with Canada’s leading lenders to provide you a mortgage solution that fits your budget. Our mortgage and financing process is amazingly simple, we represent you and match you with the best suited mortgage as per your needs. This way we can guide you through this complicated process with our years of mortgage financing experience.
• We are dedicated and professional Accredited Mortgage Brokers in GTA.
• We are well trained and have experience in the mortgage financing field more than 10 years.
• We can shop around with different lenders to get you the best possible mortgage rates and conditions as well.
• We have different options for different income and credit level with access to number of private lenders to suit borrower’s needs.

Contact us-
We are a professional mortgage broker in GTA. We can help you secure a mortgage with best mortgage interest rates. We are located at 2 County Court Blvd., Suite # 438, Brampton, ON L6W 3W8. Call MB Mortgages Inc. today at 905-458-6929/416-939-7131 for your queries or you can email us at: [email protected] or you can visit our website at

The information provided in this blog post is intended to provide general information. You should consult with a mortgage professional to fully determine the scope of your situation. MB Mortgages shall not be held liable from usage of the information provided on this page. Individual situation may vary.