Ontario Land Transfer Tax

Definition

Ontario Land Transfer Tax (LTT) is a tax imposed on the value of consideration given for the registration or disposition of a beneficial interest in land in Ontario, levied under the Land Transfer Tax Act. It is payable by the transferee at the time of registration of the conveyance. Toronto imposes a parallel Municipal Land Transfer Tax (MLTT) on property located in the city, authorized by the City of Toronto Act, 2006. The 25% Non-Resident Speculation Tax (NRST) applies to specified residential acquisitions by foreign nationals, foreign corporations and taxable trustees, subject to exemptions and transitional rules. Tax residence alone is not the test: a Canadian citizen living abroad is not a foreign national for this purpose. Province-wide coverage began March 30, 2022; the rate rose from 20% to 25% on October 25, 2022. Ontario NRST.

Key rules

• Provincial LTT rates on the value of consideration:
  • 0.5% on the first $55,000
  • 1.0% on $55,001 to $250,000
  • 1.5% on $250,001 to $400,000
  • 2.0% on $400,001 to $2,000,000
  • 2.5% on amounts over $2,000,000 (applies only to one and two single-family residences)
• First-time homebuyers qualify for a refund of up to $4,000 of provincial LTT on qualifying home purchases.
• Toronto adds MLTT, with a first-time purchaser rebate of up to $4,475 where eligible. For one or two single-family residences, rates match Ontario through $3 million; higher Toronto brackets effective April 1, 2026 are 4.40% ($3m–$4m), 5.45% ($4m–$5m), 6.50% ($5m–$10m), 7.55% ($10m–$20m) and 8.60% above $20m. These are marginal rates. Toronto also has a separate 10% MNRST on certain foreign purchases from January 1, 2025. City rates.
• The Non-Resident Speculation Tax (NRST) is 25% of the value of consideration on residential property (1 to 6 single-family residences) purchased by foreign nationals, foreign corporations, or taxable trustees. The current 25% rate applies from October 25, 2022, subject to transitional relief.
• Transfers between related corporations may qualify for deferrals or exemptions, but require specific conditions (beneficial ownership unchanged, certain family trusts, etc.) and must be documented carefully.

The table assumes one or two single-family residences, no rebate or exemption, and excludes NRST, MNRST and registration/administration fees. The $2.5 million provincial calculation is $275 + $1,950 + $2,250 + $32,000 + $12,500 = $48,975. Ontario calculation rules.

Example

A corporation buys an Ottawa commercial property for $1,200,000 in March 2026. Provincial LTT is calculated as: $275 (first $55,000 at 0.5%) + $1,950 ($195,000 at 1.0%) + $2,250 ($150,000 at 1.5%) + $16,000 ($800,000 at 2.0%) = $20,475. No Toronto MLTT applies (Ottawa is outside Toronto). No NRST applies (assume the property is entirely commercial, with no residential component subject to NRST). Total LTT at closing is $20,475.

Common mistakes

• Assuming the 2.5% top rate applies to any property over $2 million. The 2.5% rate applies only to one- and two-family residential property; other property types cap at 2.0% above $400,000.
• Missing the first-time homebuyer rebate. Eligible purchasers can claim the provincial refund at registration or apply to the Ministry within 18 months of registration. Ontario claim requirements.
• Ignoring NRST on purchases through Ontario corporations controlled by foreign nationals. The NRST looks through to beneficial ownership and applies to taxable trustees and foreign-controlled corporations.
• Failing to plan for MLTT in Toronto transactions. The municipal charge can exceed the provincial charge on high-value residential property; use the rates effective for the transaction date.

Related concepts

• Ontario HST
• GST on Real Property