Buying a condo in Forest Hill or downtown Toronto? One of the biggest line items at closing is often land transfer tax, and in Toronto you typically pay it twice. It can be a surprise if you have only budgeted for your down payment and legal fees. In this guide, you’ll learn what you owe, how to calculate it, common closing costs for condos, and where special rules like first‑time rebates may apply. Let’s dive in.
Two taxes every Toronto condo buyer pays
If your condo is in the City of Toronto, you usually pay both of the following at closing:
- Ontario Land Transfer Tax (LTT): A provincial tax on the transfer of real property. Your lawyer collects and remits it on closing.
- City of Toronto Municipal Land Transfer Tax (MLTT): A separate municipal tax charged in addition to the provincial LTT for properties in Toronto, including Forest Hill and downtown.
You are responsible for both taxes. They are due at registration/closing, not when you sign the offer.
How the taxes are calculated
Both taxes use a tiered, marginal rate system. That means each portion of your purchase price is taxed at the rate for that bracket, and the results are added together. The provincial LTT and the Toronto MLTT are calculated separately, then combined.
The five‑step method
Confirm your exact purchase price from the Agreement of Purchase and Sale.
Break the price into the official tax brackets for each tax authority.
Multiply each portion by the applicable rate for that bracket.
Add up the bracket totals to get the provincial LTT. Do the same to get the Toronto MLTT.
Add provincial LTT + Toronto MLTT to find your combined land transfer tax.
Illustrative example: $800,000 condo
Here is the process you would follow for an $800,000 purchase price:
- Apply the provincial brackets to $800,000, calculate tax on each portion, and sum the results to get your provincial LTT.
- Apply the City of Toronto brackets to $800,000, calculate tax on each portion, and sum the results to get your municipal MLTT.
- Add those two totals together for your combined land transfer tax due at closing.
Rates, bracket thresholds, and rebate amounts can change. Before you rely on a number, verify the current brackets using the Government of Ontario’s Land Transfer Tax page and the City of Toronto’s Municipal Land Transfer Tax page, or use their official calculators. Your lawyer can also provide a written estimate once your offer is firm.
First‑time buyer rebates
If you are buying your first home, you may qualify for land transfer tax rebates from both Ontario and the City of Toronto. These programs can partially or fully offset your provincial and municipal LTT, depending on the current maximums and your eligibility. You will complete the required forms with your closing documents, and your lawyer will apply the rebate at closing or help you request a refund after.
Eligibility rules matter. First‑time status, residency, purchase price limits, and timing all affect whether you qualify. Review the current criteria on the official provincial and City of Toronto pages and confirm with your lawyer early in the process.
New builds, HST, and assignments
- Resale condos: The purchase price is generally not subject to HST, but land transfer tax still applies.
- New‑build condos: HST applies on new construction. Builders often include HST in the price or handle it with rebates, but the approach varies. Confirm in writing whether HST is included and how any rebate is treated on closing. Land transfer tax still applies when title is transferred.
- Assignment sales: Assignments can trigger different tax treatment for HST and potentially for land transfer timing. Obtain legal and tax advice before you sign.
For new homes, review guidance from the Canada Revenue Agency (CRA), Canada Mortgage and Housing Corporation (CMHC), and Tarion, and have your lawyer explain interim occupancy, builder adjustments, and warranty items that can affect cash at closing.
Non‑resident buyers
If you are not a Canadian citizen or permanent resident, separate non‑resident or foreign buyer taxes and rules may apply in Ontario. These can add materially to your closing costs. Review current guidance from the Ontario Ministry of Finance and speak with a lawyer before you commit to a purchase.
Your Forest Hill/downtown closing budget checklist
Land transfer tax is a major line, but it is not the only one. Build a realistic budget that includes:
- Combined land transfer taxes: Provincial LTT + Toronto MLTT.
- Legal fees and disbursements: Roughly CA$800 to CA$2,500 depending on complexity and services.
- Title insurance: Roughly CA$100 to CA$400 for most condo purchases.
- Status certificate: Often provided by the seller, but if needed, budget CA$100 to CA$200.
- Mortgage‑related items: Possible appraisal fee, lender legal/admin fees, and mortgage default insurance if your down payment is under 20%.
- Adjustments on closing: Prepaid common expenses, property tax adjustments, and utilities. These can increase or decrease your final amount due.
- HST considerations for new builds: Confirm if HST is included in the price and how any rebate is handled.
- Recommended buffer: Many lawyers suggest keeping an extra 1 to 2 percent of the purchase price available for last‑minute adjustments.
Tip: Deposits you have already paid reduce the balance of the purchase price, but do not reduce land transfer tax. LTT is calculated on the full purchase price.
Quick planning timeline for Q1–Q2 buyers
- Before you shop: Review the official provincial and City of Toronto LTT pages and try their calculators to understand how price points affect tax.
- When you are ready to offer: Ask your lawyer for a preliminary closing cost estimate that includes LTT, legal fees, title insurance, and expected adjustments.
- Firm deal in hand: Confirm first‑time buyer rebate eligibility and gather any required forms and ID. If it is a new build, confirm HST treatment and builder adjustments in writing.
- Two weeks before closing: Get final wire instructions from your lawyer, line up certified funds for taxes and fees, and ask for an updated statement of adjustments.
What to bring to closing
- Government‑issued ID for all buyers
- Certified funds or wire transfer per your lawyer’s instructions
- Mortgage instructions from your lender
- First‑time buyer rebate forms and supporting ID if you qualify
- Proof of residency or status if non‑resident rules could apply
FAQs
Do Toronto condo buyers pay both provincial and municipal land transfer taxes?
- Yes. If your condo is in the City of Toronto, you generally pay both Ontario’s Land Transfer Tax and Toronto’s Municipal Land Transfer Tax at closing.
When do you pay land transfer tax in Toronto?
- At registration/closing. Your lawyer collects the funds and remits the taxes as part of your closing statement.
Does land transfer tax apply to condos the same way as houses?
- Yes. LTT applies to the condo’s purchase price using the same tiered system. New builds add separate HST considerations.
Are first‑time buyers exempt from land transfer tax in Toronto?
- Not fully exempt, but you may qualify for provincial and municipal rebates that can partially or fully offset your LTT, subject to eligibility and current maximums.
Do deposits reduce the amount of land transfer tax I owe?
- No. LTT is calculated on the full purchase price, not the balance after your deposit.
What should non‑resident buyers know about extra taxes in Ontario?
- Separate non‑resident or foreign buyer taxes and rules may apply in Ontario; review current Ministry of Finance guidance and get legal advice before you buy.
If you want a clear, boutique path to a Forest Hill or downtown condo purchase, including a personalized closing cost plan and property options that fit your lifestyle, connect with Shirel Shayo.
