Are you comparing a condo in downtown Toronto with a home or condo in Mississauga and wondering how land transfer tax might sway your budget? You’re not alone. Closing costs can surprise buyers, and the Toronto municipal land transfer tax often catches people off guard. In this guide, you’ll learn how Ontario’s land transfer tax works, why Toronto adds a second tax, what Mississauga buyers pay instead, and how to plan your closing funds with real number examples. Let’s dive in.
Ontario land transfer tax basics
Ontario charges a provincial Land Transfer Tax (LTT) on most real estate purchases. It uses a tiered schedule, which means you pay one rate on the first part of the price, a higher rate on the next portion, and so on. The higher your purchase price, the more you pay in total.
You pay this tax at closing. Your real estate lawyer typically submits it for you, so you need these funds available along with your down payment and other closing costs.
Toronto municipal land transfer tax
If you buy within the City of Toronto, you pay a second LTT to the city using the same tiered structure as Ontario. In simple terms, Toronto’s municipal LTT generally mirrors the provincial LTT amount before rebates. That is why many buyers say LTT in Toronto feels like “double.”
First-time buyers may qualify for a municipal rebate in addition to the provincial rebate, but the programs have different eligibility rules and maximums. The combined rebates can reduce what you owe, especially on lower-priced homes, but they do not always eliminate the tax on higher-priced properties.
Mississauga: no municipal LTT
Mississauga buyers pay the provincial LTT only. There is no municipal land transfer tax in Mississauga. That difference can be material as prices rise, because the “extra” you pay in Toronto is roughly equal to the provincial LTT amount for the same purchase price.
Real purchase examples (illustrative)
Below are example provincial LTT amounts for common price points. If you buy in Toronto, you also owe a municipal LTT that uses the same schedule. If you buy in Mississauga, you owe the provincial LTT only. These examples are approximate and for planning purposes.
$500,000 purchase price:
- Ontario LTT: about $6,475
- Mississauga: about $6,475 total
- Toronto: about $12,950 total before any rebates
$600,000 purchase price:
- Ontario LTT: about $8,475
- Mississauga: about $8,475 total
- Toronto: about $16,950 total before any rebates
$750,000 purchase price:
- Ontario LTT: about $11,475
- Mississauga: about $11,475 total
- Toronto: about $22,950 total before any rebates
$1,000,000 purchase price:
- Ontario LTT: about $16,475
- Mississauga: about $16,475 total
- Toronto: about $32,950 total before any rebates
$1,500,000 purchase price:
- Ontario LTT: about $26,475
- Mississauga: about $26,475 total
- Toronto: about $52,950 total before any rebates
Key takeaway: the Toronto premium is approximately the provincial LTT amount for your price, which grows with the purchase price.
First-time buyer rebates: what to know
Ontario offers a first-time homebuyer rebate up to a set maximum, and the City of Toronto offers a separate municipal rebate with its own maximum. If you qualify, each rebate applies to its respective tax. For a buyer purchasing in Toronto, you may get both. For a buyer purchasing in Mississauga, only the provincial rebate applies.
Eligibility rules vary. Programs consider factors like whether you have ever owned a home anywhere in the world, your residency status, and when you will occupy the home. Always confirm current rules, eligibility, and maximum rebate amounts on the official Government of Ontario and City of Toronto pages or with your lawyer.
What to budget at closing
LTT is just one part of your closing funds. Plan for:
- Land Transfer Tax: provincial LTT, plus municipal LTT if buying in Toronto
- Legal fees and disbursements
- Title insurance
- Title registration and mortgage registration fees
- Adjustments for property taxes and utilities
- Home inspection (if applicable)
A helpful rule of thumb for closing funds, excluding your down payment, is about 1 to 4 percent of the purchase price. Where you land in that range depends largely on LTT and the complexity of your transaction. In Toronto, the combined LTT often makes up a large share of this range.
Sample closing-funds snapshots
These examples are for planning only and do not include your down payment. They show how LTT shapes the total.
$600,000 condo in Mississauga:
- Provincial LTT: about $8,475
- Plus typical legal, title, and registration costs
- Practical takeaway: closing funds often in the low-to-mid teens when you include LTT and standard fees
$600,000 condo in downtown Toronto:
- Provincial LTT: about $8,475
- Municipal LTT: about $8,475
- Plus typical legal, title, and registration costs
- Practical takeaway: closing funds often in the mid-to-high teens before any first-time buyer rebates
$1,000,000 purchase in downtown Toronto:
- Provincial LTT: about $16,475
- Municipal LTT: about $16,475
- Plus typical legal, title, and registration costs
- Practical takeaway: expect combined LTT in the tens of thousands before any rebates
Plan your timing and payment
You normally pay LTT at closing through your real estate lawyer. Most lenders do not finance LTT directly into the mortgage, so set aside cash for it as part of your closing funds. If you qualify for a rebate, your lawyer can help apply it against what you owe.
If you are purchasing new construction, HST and builder-related rebates follow different rules than resale LTT. Ask your lawyer to walk you through how those apply to your agreement.
Decision checklist: Toronto vs Mississauga
Use the LTT difference as one quantifiable factor among many. Here is a simple checklist to frame your decision:
- Commute and time: How much would a shorter commute or access to downtown transit save you in time and money?
- Space and lifestyle: Would a home in Mississauga offer more space or different amenities for the same budget?
- Carrying costs: Compare property taxes, utilities, condo fees, and parking.
- Market liquidity: How active are listings and sales in your target buildings or neighborhoods?
- First-time buyer status: Will provincial and municipal rebates meaningfully reduce your upfront cost?
- Long-term fit: Consider your 3 to 7 year horizon, not just the first year.
Bottom line
If you buy within the City of Toronto, you should plan for both the provincial and a matching municipal land transfer tax. If you buy in Mississauga, you pay only the provincial LTT. This difference grows with price and can be a major factor in your closing funds.
If you want a clear, numbers-first plan tailored to your move, reach out to Todd Armstrong. We will help you compare scenarios, estimate closing funds, and align your search with your budget and lifestyle.
FAQs
What is the land transfer tax difference between Toronto and Mississauga?
- Toronto buyers pay Ontario’s provincial LTT and a matching municipal LTT, while Mississauga buyers pay only the provincial LTT.
How much extra LTT would I pay in Toronto on a $1,000,000 purchase?
- About $16,475 more than Mississauga, because the municipal LTT roughly mirrors the provincial amount before any rebates.
Do first-time buyers get rebates on land transfer tax?
- Yes, Ontario offers a provincial rebate and Toronto offers a separate municipal rebate; eligibility and maximums differ, so confirm on official pages or with your lawyer.
When is land transfer tax paid in Ontario?
- At closing through your lawyer, so you need cash available as part of your closing funds.
Does Mississauga charge a municipal land transfer tax?
- No, Mississauga does not charge a municipal LTT; you pay only the provincial LTT for purchases in Mississauga.
Does Toronto’s municipal LTT apply to all GTA addresses?
- No, it applies only to properties within the legal boundaries of the City of Toronto, which includes downtown Toronto.
Are there extra taxes for non-resident buyers?
- Additional provincial surcharges have applied to non-resident or foreign buyers in some regions; check current Ontario rules for your situation.