When purchasing property in Ontario, buyers must pay a land transfer tax (LTT) upon closing. This is a cost many overlook when budgeting for their home.
How Is It Calculated?
The tax is calculated on a sliding scale based on the property’s purchase price. For example:
- 0.5% on the first $55,000
- 1% on the next $195,000
- 1.5% on the next $150,000
- 2% on the amount exceeding $400,000
Additional Municipal Tax (Toronto)
If you’re buying in Toronto, an additional municipal land transfer tax applies, effectively doubling the cost.
First-Time Buyer Rebate
Eligible first-time homebuyers can receive a rebate of up to $4,000, potentially eliminating the tax for homes under $368,000.
Plan Ahead
Since the LTT is due at closing, it’s essential to include this in your budget to avoid last-minute surprises.