This article was written in 2014. It captures the frustration many Ontarians feel when faced with the surprise cost of the Land Transfer Tax. The Ontario Home Ownership Savings Plan has been phased out since then. The Land Transfer Tax Refund for First-Time Homebuyers remains the primary form of relief. Home prices have soared since 2014. As a result, this tax has become a larger burden. Cities like Toronto have an additional Municipal Land Transfer Tax that now applies. If you’re planning to buy property in Ontario, this tax still deserves your close attention.
The Land Transfer Tax is one of those interesting pains in the arse in Ontario. It bites you when you are thinking about buying a house or property. Luckily when I bought my first house, I didn’t have to pay the land transfer tax. I used an Ontario Home Owner Savings Plan (along since gone program). The main feature (for 1st home buyers only) was not having to pay the Land Transfer Tax. This forgiving of the Land Transfer Tax on first homes has been replaced by the Land Transfer Tax Refund for First-time Homebuyers (please read that carefully).
A much more up to date version of this can be found here.
You Can Be Taxed Even If No Money Is Exchanged
A lesser-known (and kind of shocking) fact about Ontario’s Land Transfer Tax (LTT) is that you can owe LTT even if no cash changes hands. For instance, adding someone’s name to your property’s title can trigger land transfer tax. This can happen for estate planning or co-signing. The tax is based on the market value of the share transferred, even if no money was paid. This happens often in separations, estate planning, or refinancing.
In these scenarios, “consideration” doesn’t mean cash. It includes the assumption of a mortgage. It might also mean a change in beneficial ownership. The CRA and Ontario Ministry of Finance both treat these as taxable transactions.
What Shocks Most People About Ontario Land Transfer Tax
Most Ontarians are shocked to learn:
1. Toronto has a second, municipal land transfer tax
If you buy in Toronto, you pay double. The City of Toronto charges a Municipal Land Transfer Tax on top of the provincial LTT. The rate and brackets are nearly identical, meaning a $1 million home could cost you over $32,000 in combined LTTs.
🔗 Toronto’s Municipal LTT Info
2. The tax brackets haven’t kept up with home prices
Ontario’s LTT brackets haven’t changed meaningfully since 1989. That means nearly every home in places like Toronto, Ottawa, and Mississauga now triggers the highest tax tier, even though it was originally intended for luxury properties. In 1989, a $400,000 home was elite — now it’s entry-level.
3. The refund for first-time buyers is capped
Home prices have skyrocketed. The maximum refund for first-time buyers in Ontario is still only $4,000. This amount is enough to cover LTT on a $368,000 home. Good luck finding one of those in 2025.
🔗 First-Time Home Buyer Refund Details (Ontario)
Well in Toronto, not only do you pay the Ontario Land Transfer Tax, you also pay the Toronto land transfer tax, so basically you pay it twice.
This all said… I’m in favour of it. The money will have to come from some source of taxation, and generally I prefer an optional consumption tax over a mandatory income tax.
THAT is what Gail Vaz-Oxlade was talking about then. She commented about the Average Land Xfer tax in Toronto being $30K and I couldn’t figure it out, NOW I get it!
Oh and HOLY CRAP!!!! I’d rather have no taxes, but I also am the old guy who shouts and waves his fist at the kids on my front lawn, take no notice of the old crazy guy….