Double Land Transfer Tax in Toronto — What It Actually Costs You at Closing
Toronto is the only municipality in Ontario with its own land transfer tax, meaning buyers pay two parallel LTT stacks — one provincial, one municipal — calculated on identical bracket schedules. On a $900,000 purchase the gross combined bill is $28,950 before rebates. First-time buyers can recover up to $4,000 provincially and $4,475 municipally, reducing net exposure to roughly $20,475. These figures are deterministic from the bracket schedules; the only variable is whether one or both co-purchasers qualify for the FTHB rebate.
Who this is for
Salaried Toronto-area buyers — particularly first-time purchasers — who are budgeting closing costs and need to understand the stacked provincial-plus-municipal land transfer tax obligation before they firm up an offer.
- Ontario LTT (gross, $900k)
- $14,475 — see bracket math below
- Toronto MLTT (gross, $900k)
- $14,475 — identical bracket schedule
- Combined gross LTT
- $28,950
- FTHB rebates (one qualifying purchaser)
- −$4,000 provincial + −$4,475 municipal = −$8,475
- Net LTT after rebates
- $20,475
Framework
Bracket arithmetic — Ontario LTT on $900,000
The Ontario Land Transfer Tax Act applies a graduated schedule. Working through each bracket on a $900,000 purchase price:
0.5% on the first $55,000 = $275 1.0% on $55,001–$250,000 (i.e., $195,000 × 1.0%) = $1,950 1.5% on $250,001–$400,000 (i.e., $150,000 × 1.5%) = $2,250 2.0% on $400,001–$2,000,000 (i.e., $500,000 × 2.0%) = $10,000
Total Ontario LTT = $275 + $1,950 + $2,250 + $10,000 = $14,475
There is no separate residential surtax at this price point. The only additional bracket — 2.5% on amounts above $2,000,000 for properties containing one or two single-family residences — is irrelevant to any purchase below $2M and to condos at any price.
Toronto MLTT — same schedule, second bill
The City of Toronto's Municipal Land Transfer Tax uses an identical bracket structure to Ontario's provincial LTT. On a $900,000 purchase the calculation is arithmetically identical:
0.5% on first $55,000 = $275 1.0% on $55,001–$250,000 = $1,950 1.5% on $250,001–$400,000 = $2,250 2.0% on $400,001–$2,000,000 = $10,000
Total Toronto MLTT = $14,475
Combined gross LTT obligation: $14,475 + $14,475 = $28,950. Buyers purchasing anywhere in the 416 pay this double stack; buyers in the 905 (Mississauga, Brampton, Markham, etc.) pay only the provincial LTT — half the bill.
First-time buyer rebates — caps and mechanics
Ontario FTHB rebate: Refunds provincial LTT up to a maximum of $4,000. The full $4,000 cap is reached at a purchase price of approximately $368,333 (where provincial LTT first equals $4,000). On a $900,000 purchase, provincial LTT is $14,475, so the rebate is capped at $4,000 — not the full tax.
Toronto MLTT FTHB rebate: Refunds municipal LTT up to a maximum of $4,475. On a $900,000 purchase, the full $4,475 is recovered.
Co-purchaser rule: If one co-purchaser has previously owned a home anywhere in the world, the rebate is not automatically lost — the qualifying purchaser can still claim the full rebate, provided they have never owned a home. The rebate is not prorated by ownership share under current Ontario and Toronto rules.
Combined maximum rebate (one FTHB co-purchaser): $4,000 + $4,475 = $8,475 Net LTT on $900,000: $28,950 − $8,475 = $20,475
How price point shifts the exposure — a $1.4M example
At $1,400,000 the bracket math for each stack is:
0.5% on $55,000 = $275 1.0% on $55,001–$250,000 = $1,950 1.5% on $250,001–$400,000 = $2,250 2.0% on $400,001–$2,000,000 (i.e., $1,000,000 × 2.0%) = $20,000
Each stack = $24,475. Combined gross = $48,950.
At $1.4M both buyers are likely to be move-up purchasers with no FTHB rebate eligibility. Net LTT = $48,950. This is a material closing-cost line item — roughly 3.5% of purchase price — that must be funded from liquid savings, not from the mortgage. Lenders do not finance LTT; it is a cash-at-close obligation.
Cash-flow and mortgage qualification implications
LTT is payable on closing day and cannot be rolled into the mortgage under any federally regulated lender's policy. For a $900,000 purchase with 10% down ($90,000), a buyer must also have $20,475 in liquid funds for net LTT (FTHB scenario) plus legal fees ($2,000–$3,500), title insurance ($400–$700), and home inspection costs. Total non-down-payment closing costs in Toronto routinely run $23,000–$28,000 on a $900,000 purchase.
Under OSFI B-20 GDS/TDS stress-test qualification, LTT does not affect the qualifying calculation directly — but insufficient liquid reserves post-close can trigger lender concern about financial resilience. Some lenders informally require 1.5% of purchase price in post-close liquid reserves; confirm with your lender.
Toronto vs. 905 — the geography premium
The MLTT applies only within the City of Toronto boundaries (the former 416 amalgamated city). A buyer choosing between a $900,000 condo in North York (416) and a comparable property in Mississauga or Markham (905) faces a $14,475 gross MLTT differential — or $10,000 net after the Toronto FTHB rebate for a qualifying first-time buyer. Over a 5-year hold, that differential is equivalent to roughly 30–40 bps of additional effective mortgage cost on a $720,000 mortgage. For buyers with flexibility on geography, the MLTT is a quantifiable factor in the rent-vs-buy and 416-vs-905 decision.
Key considerations
- The Ontario FTHB rebate and Toronto MLTT FTHB rebate are each claimed separately — the Ontario rebate is applied at registration through Teraview by your real estate lawyer, and the Toronto rebate is claimed through the City's online portal within 18 months of closing. Missing the Toronto filing deadline forfeits the $4,475.
- If neither purchaser qualifies as a first-time buyer, the full $28,950 (on a $900,000 purchase) is due at closing with no offset. Budget accordingly and do not assume a rebate you haven't confirmed eligibility for.
- The definition of 'first-time buyer' for LTT purposes requires that you have never owned a home anywhere in the world — not just in Canada. A buyer who owned property abroad before immigrating does not qualify.
- New construction condos in Toronto are subject to LTT on the purchase price including HST-adjusted value in some assignment scenarios. Confirm the taxable amount with your lawyer before closing, as the LTT base can differ from the headline contract price.
- LTT is calculated on the total consideration, which includes assumed mortgages. If you are purchasing a property and assuming the seller's mortgage, the assumed balance is included in the LTT base — a detail that catches buyers in private-sale or assumption transactions.
Common mistakes
- Budgeting only the provincial LTT and discovering the Toronto MLTT on closing day — this leaves buyers $10,000–$15,000 short of liquid funds needed to close, which can trigger a default on the purchase agreement.
- Assuming both co-purchasers must be first-time buyers to claim any rebate — in fact, one qualifying purchaser can claim the full rebate under both Ontario and Toronto rules, so mixed-status couples should not self-disqualify.
- Filing the Toronto MLTT rebate late or not at all — the City's 18-month window is firm, and there is no administrative discretion to extend it. A $4,475 forfeiture is the consequence.
- Treating LTT as a mortgage-eligible cost — no federally regulated lender will finance LTT, and private lenders who offer to 'roll in closing costs' are typically charging a rate premium that exceeds the LTT amount over the term.
- Comparing Toronto and 905 properties without adjusting for the MLTT differential — a $900,000 Toronto property effectively costs $10,000–$14,475 more at closing than an equivalent 905 property, which changes the true price comparison.
Action steps
- 01Run the bracket math yourself before making an offer: multiply each bracket increment by its rate, sum the four tiers, then double it for Toronto. Confirm the result against the City of Toronto's MLTT calculator at toronto.ca before relying on any third-party estimate.
- 02Confirm your FTHB eligibility status — and your co-purchaser's — before assuming any rebate. Check the Ontario definition at ontario.ca/page/land-transfer-tax and the Toronto definition at toronto.ca/services-payments/property-taxes-utilities/municipal-land-transfer-tax-mltt.
- 03Instruct your real estate lawyer to apply the Ontario FTHB rebate at registration and to file the Toronto MLTT rebate claim within 18 months of closing. Put both deadlines in writing with your lawyer at the time of retainer.
- 04Add the net LTT figure (after confirmed rebates) to your closing-cost budget alongside legal fees, title insurance, and home inspection costs. For a $900,000 Toronto purchase with one FTHB, plan for at least $23,000–$26,000 in non-down-payment closing costs.
- 05If you are comparing a 416 property to a 905 alternative at similar price points, calculate the MLTT differential explicitly and treat it as an upfront cost premium for the Toronto option — it is a real, quantifiable number, not a soft factor.