Buying a condo in downtown Toronto? The land transfer tax can be a surprise line item that changes your cash-to-close by tens of thousands of dollars. You want a clear, simple way to estimate what you’ll owe, whether you qualify for first-time buyer rebates, and how to budget with confidence. In this guide, you’ll learn how Toronto’s two land transfer taxes work, see step-by-step examples, and get a practical closing-cost checklist tailored to downtown condos. Let’s dive in.
Toronto land transfer tax basics
When you buy in the City of Toronto, you pay two separate taxes on the purchase price:
- Ontario Land Transfer Tax, paid to the province
- Toronto Municipal Land Transfer Tax, paid to the city
Both taxes use the same graduated brackets and are calculated on the same purchase price. The amounts are then added together. The practical takeaway is simple: buying in downtown Toronto generally doubles your land transfer tax compared with a similar purchase outside the city.
For an overview of Ontario’s rules, see the Government of Ontario’s page on land transfer tax. For the municipal side, review the City’s page on the municipal land transfer tax.
How the tax is calculated
Both the provincial and municipal taxes are calculated in tiers. For each tax, you apply a rate to each portion of the price that falls within that bracket, then add up the results.
Common brackets used in examples below:
- 0.5% on the first $55,000
- 1.0% on the amount over $55,000 up to $250,000
- 1.5% on the amount over $250,000 up to $400,000
- 2.0% on the amount over $400,000
Your real estate lawyer typically calculates and pays both taxes at closing as part of registering your purchase.
You can also run numbers yourself using the City’s Land Transfer Tax Calculator.
Worked examples for downtown condos
Below are clear, step-by-step calculations using the brackets above. Each example shows the provincial tax, the municipal tax calculated the same way, and the combined total.
Example 1: $600,000 condo
Ontario LTT
- 0.5% of $55,000 = $275
- 1.0% of $195,000 = $1,950
- 1.5% of $150,000 = $2,250
- 2.0% of $200,000 = $4,000
- Total Ontario LTT = $8,475
Toronto MLTT
- Same bracket method on $600,000
- Total Toronto MLTT = $8,475
Combined LTT
- $8,475 + $8,475 = $16,950
Example 2: $1,000,000 condo
Ontario LTT
- 0.5% of $55,000 = $275
- 1.0% of $195,000 = $1,950
- 1.5% of $150,000 = $2,250
- 2.0% of $600,000 = $12,000
- Total Ontario LTT = $16,475
Toronto MLTT
- Same bracket method on $1,000,000
- Total Toronto MLTT = $16,475
Combined LTT
- $16,475 + $16,475 = $32,950
Example 3: $1,500,000 condo
Ontario LTT
- 0.5% of $55,000 = $275
- 1.0% of $195,000 = $1,950
- 1.5% of $150,000 = $2,250
- 2.0% of $1,100,000 = $22,000
- Total Ontario LTT = $26,475
Toronto MLTT
- Same bracket method on $1,500,000
- Total Toronto MLTT = $26,475
Combined LTT
- $26,475 + $26,475 = $52,950
Tip: Always confirm your exact numbers with the City’s calculator or your lawyer, especially if your offer price changes.
First-time buyer rebates
If you are a qualifying first-time homebuyer, you can apply for two separate refunds to reduce your combined land transfer tax at closing.
- Provincial refund: See Ontario’s page on land transfer tax refunds for first-time homebuyers. The maximum refund is commonly cited up to $4,000. Eligibility rules apply.
- Municipal refund: The City of Toronto offers its own first-time buyer rebate on the municipal tax. Review details on the City’s municipal land transfer tax page. The municipal maximum is commonly cited around $4,475. Eligibility rules apply.
Who qualifies
Typical eligibility factors include:
- You have never owned an interest in a home anywhere in the world
- Your spouse or common-law partner has not owned a home during your relationship
- You will occupy the property as your principal residence within a set period
- You meet citizenship or residency requirements as defined by the program
Your lawyer will guide you on the exact documentation and declarations required. The rules can differ for joint purchasers and some special cases.
How rebates are applied
- Most lawyers apply both rebates directly on your closing statement, which reduces the cash you need on closing day
- If a rebate is not applied at closing, you can submit an application after registration, but reimbursement takes longer
- Pre-construction or assignment purchases may be handled differently, so ask your lawyer how timing works for your deal
Other cases to know
- Non-resident buyers: Additional taxes or program rules may apply to non-residents. These policies change, so confirm with your lawyer and review current provincial guidance.
- New-build condos and HST: New construction can involve HST and possible HST rebates. Builders often reflect this in the purchase agreement. Ask your lawyer how HST interacts with your deal.
- Mortgage default insurance: If your down payment is less than 20 percent, mortgage default insurance is usually required. Learn more about how this premium works from CMHC’s overview of mortgage loan insurance. The premium is often added to your mortgage but affects monthly payments.
What to budget for closing in downtown
Beyond the purchase price and deposit, your cash-to-close typically includes:
- Combined land transfer taxes, before any rebates
- Legal fees and disbursements, often $800 to $2,000
- Title insurance, often $200 to $400
- Home inspection for resale condos, often $300 to $700
- Adjustments, such as prorated condo fees, property taxes, utilities
- Move-in or elevator booking fees charged by the condo, up to several hundred dollars
- Land registry and small administrative fees
- Mortgage-related costs, such as lender fees or appraisal, if applicable
For a broader overview of closing expenses, review the Financial Consumer Agency of Canada’s guide to closing costs.
Cash-to-close illustrations for condos
These examples assume a 5 percent deposit paid on offer, a 20 percent total down payment target, and typical legal and title costs. They also assume your lawyer applies any first-time buyer rebates at closing.
Example A — $600,000 condo
- Purchase price: $600,000
- Deposit paid: $30,000
- Total down payment target: 20 percent = $120,000
- Remaining down payment due at closing: $90,000
- Combined LTT before rebates: $16,950
- Estimated legal, title, and misc: $2,300
Cash to close after deposit
- Not a first-time buyer: $90,000 + $16,950 + $2,300 = $109,250
- First-time buyer: $90,000 + $8,475 + $2,300 = $100,775
Example B — $1,000,000 condo
- Purchase price: $1,000,000
- Deposit paid: $50,000
- Total down payment target: 20 percent = $200,000
- Remaining down payment due at closing: $150,000
- Combined LTT before rebates: $32,950
- Estimated legal, title, and misc: $3,000
Cash to close after deposit
- Not a first-time buyer: $150,000 + $32,950 + $3,000 = $185,950
- First-time buyer: $150,000 + $24,475 + $3,000 = $177,475
Note: If your down payment is less than 20 percent, factor in mortgage default insurance and discuss structure and timing with your mortgage professional, since premiums are usually added to the mortgage rather than paid in cash at closing.
Smart tips for downtown condo buyers
- Run both taxes: Use the City’s calculator for every offer price you consider
- Verify rebates early: Confirm first-time buyer eligibility with your lawyer well before closing
- Compare buildings apples-to-apples: Add combined LTT when comparing effective cost per square foot
- Ask about adjustments: Clarify condo fee, utility, and tax adjustments so there are no surprises
- Pre-construction or assignments: Get legal advice on LTT timing and how HST treatment could affect you
Buying in downtown Toronto means navigating two land transfer taxes, possible first-time buyer refunds, and a handful of closing costs. With the right plan, you can budget with precision and move forward with confidence. If you want a clear cost picture on specific buildings and units, or you want help crafting a strategy that fits your budget, reach out to Todd Armstrong for data-informed guidance.
FAQs
What is the difference between Ontario LTT and Toronto MLTT?
- Ontario LTT is paid to the province and Toronto MLTT is paid to the city. Both use the same price brackets and are added together for purchases in Toronto.
How much tax on a $600,000 downtown Toronto condo?
- Using common brackets, Ontario LTT is $8,475 and Toronto MLTT is $8,475, for a combined $16,950. Always confirm with the City’s calculator.
Do first-time buyers get both rebates in Toronto?
- If you qualify, you can claim a provincial refund and a municipal refund. See Ontario’s first-time buyer refund rules and the City’s municipal LTT page for details.
Are pre-construction or assignment condos taxed differently?
- LTT still applies, but timing and HST treatment can differ. Ask your lawyer how your specific agreement handles LTT, HST, and any assignment-related amounts.
What closing costs should I budget besides LTT?
- Plan for legal fees, title insurance, possible inspection, adjustments, condo move-in fees, registry and admin charges, and any mortgage-related fees. Review FCAC’s closing costs guide for context.
