Buying in Bedford Park, Lawrence Park or anywhere in Toronto, and wondering why your closing cash looks higher than expected? You are not alone. Land transfer tax is a big one-time cost in Toronto, and it can surprise even experienced buyers. In this guide, you will learn how Ontario and City of Toronto land transfer taxes work, how to estimate what you will pay at different price points, which rebates might help, and how to budget with confidence. Let’s dive in.
What is land transfer tax
Land transfer tax is a one-time tax you pay when your purchase is registered. In Toronto, you usually pay two versions of the tax: the Ontario provincial land transfer tax and the City of Toronto municipal land transfer tax. Both are calculated using tiered rate bands, so different portions of your price are taxed at different rates. Your lawyer typically collects and pays the tax at closing.
Ontario and Toronto rate bands
Both Ontario and Toronto use the same standard residential rate bands. The rates apply marginally, which means you apply each rate only to the portion of the price that falls in that band.
- 0.5% on the first $55,000
- 1.0% on the portion from $55,000.01 to $250,000
- 1.5% on the portion from $250,000.01 to $400,000
- 2.0% on the portion over $400,000
Because Toronto mirrors the provincial bands, your combined land transfer tax is essentially the sum of two identical calculations, minus any eligible refunds.
How to calculate your tax
Use a simple step-by-step method to estimate your total.
- Break your purchase price into portions that fit each band.
- Multiply each portion by that band’s rate to get the provincial total.
- Repeat for the municipal total.
- Add the two amounts and subtract any eligible refunds.
A quick rule of thumb: for Toronto purchases above $400,000, each extra dollar is effectively taxed at 4% combined. That is 2% provincial plus 2% municipal. This shortcut is helpful when you compare two potential offer prices.
Lawrence Park price examples
Lawrence Park’s mix includes condos, semis, and many higher-priced detached homes. These examples show how the math works at common local price points.
Example A: $800,000 purchase
Provincial LTT
- 0.5% of $55,000 = $275
- 1.0% of $195,000 = $1,950
- 1.5% of $150,000 = $2,250
- 2.0% of $400,000 = $8,000
- Provincial total = $12,475
Municipal LTT
- Uses the same banding and equals $12,475
Combined LTT
- Provincial $12,475 + municipal $12,475 = $24,950
First-time buyer refunds could reduce this amount if you qualify. Always verify current rules and maximums before relying on them.
Example B: $1,500,000 purchase
Provincial LTT
- First three bands total = $4,475
- 2.0% of $1,100,000 = $22,000
- Provincial total = $26,475
Municipal LTT
- Equals $26,475
Combined LTT
- $52,950
Example C: $2,500,000 purchase
Provincial LTT
- First three bands total = $4,475
- 2.0% of $2,100,000 = $42,000
- Provincial total = $46,475
Municipal LTT
- Equals $46,475
Combined LTT
- $92,950
For very high-value purchases, there can be extra policy considerations. Ask your real estate lawyer to confirm how current rules apply to your situation.
First-time buyer refunds
Both Ontario and the City of Toronto offer refunds for qualifying first-time buyers. Refunds have maximum amounts and specific eligibility rules that cover your status as a first-time purchaser, residency, property type, and timing. You must apply for each program separately and provide the required paperwork. Confirm the latest thresholds and maximums well before closing so you know what to expect.
New builds and special cases
Newly built homes are generally subject to land transfer tax. HST applies to new homes and builders may price or structure deals differently, which can affect your cash at closing. If you are buying pre-construction or a brand-new home, get legal and tax advice early so you understand how HST interacts with land transfer tax.
Transfers between related parties, some family law transfers, and some corporate or trust purchases can have special treatment or exemptions. These are legal matters. Engage a real estate lawyer to confirm what applies in your case.
Non-resident or foreign purchasers may face separate taxes or surcharges. These are not the same as land transfer tax and have their own rules. If you are a non-resident buyer or purchasing through a corporation, confirm the latest policies before you make an offer.
What to budget beyond LTT
Land transfer tax is only one piece of your closing costs. Build a complete plan that includes:
- Legal fees and disbursements: commonly $1,000 to $2,500, depending on complexity.
- Title insurance: often $150 to $500, based on value and insurer.
- Home inspection: about $300 to $800, plus any specialized inspections.
- Property tax and utility adjustments: prorated credits or debits at closing.
- New-build considerations: HST treatment and any new-home warranty items.
- Mortgage-related costs: appraisal fees, mortgage default insurance premiums if required, and interest adjustments.
- Bank or admin fees and moving costs.
Your cash required at closing equals your remaining down payment plus land transfer tax, legal fees, adjustments, and any other closing items. Plan for these in addition to your deposit and down payment.
Practical planning tips
- Separate one-time costs from ongoing carrying costs. That keeps your monthly budget clear and reduces surprises.
- Use the band method to estimate your land transfer tax. Then double the provincial amount to account for the municipal tax, and subtract any expected refunds.
- Build a buffer of at least 2 to 3 percent of the purchase price for closing costs on higher-priced homes. In Lawrence Park, the land transfer tax alone can be tens of thousands of dollars.
- Use the 4 percent rule of thumb above $400,000 to compare properties quickly.
When to speak with professionals
- Mortgage professional: connect when you are narrowing your target price so you can see your full cash needed at closing, including land transfer tax and all fees. Ask for affordability scenarios that factor in closing costs and the stress test.
- Real estate lawyer: engage early after your offer is accepted. They will confirm your land transfer tax, review rebates and exemptions, advise on HST for new builds, and prepare your closing statement.
- Your agent: lean on a local team that knows Lawrence Park pricing patterns and closing norms. A strong advisor will help you compare options apples to apples and time your move with confidence.
Next steps for Lawrence Park buyers
If Lawrence Park is on your shortlist, get your numbers clear before you write. Start with a realistic closing-cost plan, including your land transfer tax at your likely price point, and confirm any first-time buyer refunds. When you are ready, we will guide you through each step, from budgeting to keys on closing day, with clear communication throughout.
Have questions about a specific property or want a precise estimate for your situation? Reach out to the Jamie Dempster Team for local guidance you can trust.
FAQs
Do Lawrence Park buyers pay both Ontario and Toronto land transfer taxes?
- Yes. In most Toronto residential purchases, you pay both the provincial and the City of Toronto land transfer taxes, subject to any rebates or exemptions.
How do I estimate my land transfer tax quickly when comparing homes?
- For Toronto purchases above $400,000, use a quick 4 percent combined rule on the amount above $400,000, then add the banded amounts below that level and subtract any eligible refunds.
Are first-time buyers in Toronto fully exempt from land transfer tax?
- Not fully. There are refunds for qualifying first-time buyers, but you must meet eligibility criteria and apply correctly. Confirm the latest maximum refund amounts before closing.
Do I pay land transfer tax on a new-build home in Toronto?
- Generally yes. New builds are subject to land transfer tax, and HST applies to new homes. Builders may structure pricing differently, so get legal and tax advice to understand your closing cash.
What other closing costs should I plan for besides land transfer tax?
- Budget for legal fees, title insurance, inspections, property tax and utility adjustments, mortgage-related costs, bank fees, moving expenses, and any immediate repairs or upgrades.
