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. Non-residents and foreign corporations acquiring residential property in Ontario pay an additional 25% Non-Resident Speculation Tax (NRST), increased from 20% in March 2022 and expanded province-wide in October 2022.

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 MLTT mirrors the provincial graduated structure and applies in addition, with Toronto first-time homebuyer rebate up to $4,475 on qualifying purchases.
• 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. It applies province-wide since October 25, 2022.
• 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.

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 (commercial property is exempt; NRST is residential only). 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 must apply at registration; late claims must go through the Ministry of Finance with supporting documents.
• 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 combined provincial and municipal LTT roughly doubles the transfer cost on Toronto property.

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