Land Transfer Tax as a First-Time Buyer

When you buy your first home, the down payment gets all the attention. But on closing day there is another big cheque to write: land transfer tax. Here is how Ontario's land transfer tax works, how much a first-time buyer can save and how to make sure you get your refund.

What Is Land Transfer Tax?

Land transfer tax is a one-time tax you pay when you buy property in Ontario. It is due on closing day and your lawyer collects it as part of your closing funds. It is not included in your mortgage, so you need to budget for it in cash.

How Ontario Calculates It

The tax is charged in layers, a bit like income tax. For a home with one or two single-family residences, the rates are:

• 0.5% on the first $55,000
• 1% on the amount from $55,000 to $250,000
• 1.5% on the amount from $250,000 to $400,000
• 2% on the amount from $400,000 to $2,000,000
• 2.5% on the amount over $2,000,000

What It Looks Like in Real Numbers

Here is the provincial tax at a few common price points, before and after the full first-time buyer refund:

These are provincial amounts only, calculated from Ontario's published rates. Your lawyer will confirm your exact figure.

Buying in Toronto vs. GTA West

If you buy inside the City of Toronto, you pay a second municipal land transfer tax on top of the provincial one, with its own first-time buyer rebate. Buyers in Oakville, Mississauga, Milton and Burlington pay only the provincial tax.

That difference can add up to thousands of dollars. It is worth factoring in if you are deciding between Toronto and GTA West.

Do You Qualify for the Refund?

To qualify for Ontario's first-time buyer refund, you generally must:

• Be at least 18 years old
• Be a Canadian citizen or permanent resident
• Never have owned a home, or an interest in a home, anywhere in the world
• Move in as your principal residence within nine months of closing

Watch the spouse rule. If your spouse owned a home while you were together, neither of you can claim the refund.

Buying with someone who is not a first-time buyer? The refund is reduced to match the share owned by the first-time buyer. For example, a first-time buyer who owns 50% with a parent can claim up to half of the refund.

The refund applies to both resale and newly built homes, including condos and townhouses.

How to Claim Your Refund

1. Tell your lawyer early that you are a first-time buyer.
2. Claim it at registration. Your lawyer can apply the refund when the sale is registered, so it comes straight off the tax you owe on closing day.
3. Missed it? You can still apply to the Ontario Ministry of Finance, but you must do it within 18 months of registration.
4. Keep your paperwork, including your agreement of purchase and sale and proof you moved in.

Buying your first home? Download my Free Buyer's Guide or visit my First-Time Home Buyers page.

Tarlika Sehgal, REALTOR®, SRS®, ABR® | eXp Realty Of Canada, Inc., Brokerage

Sources

• Ontario.ca: Calculating land transfer tax
• Ontario.ca: Land transfer tax refunds for first-time homebuyers
• WOWA: Ontario land transfer tax (Toronto vs. rest of Ontario)

This article is general information, not legal or tax advice. Rates and refund rules can change. Please confirm your situation with your real estate lawyer. Information is current as of October 2026.