Buyers in Toronto generally pay Ontario land transfer tax and a separate Toronto municipal tax. Buyers in Markham and Richmond Hill generally pay the Ontario tax only. First-time buyer refunds depend on eligibility.

Information checked November 11, 2026.

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Calculate each layer separately

For a standard $900,000 resale home, Ontario’s graduated calculation is $275 on the first $55,000, $1,950 on the next $195,000, $2,250 on the next $150,000 and $10,000 on the remaining $500,000. That adds up to $14,475.

Toronto’s municipal tax for the same price is another $14,475, for a combined $28,950. For higher-value residential transactions, check each current schedule separately. Toronto and Ontario have different upper brackets.

Check first-time refunds before using them

Ontario’s first-time home buyer refund is up to $4,000. Toronto’s municipal first-time home buyer rebate is up to $4,475. In this example, a purchaser who qualifies for both in full would have $20,475 of combined tax after refunds in Toronto. With the full Ontario refund, the Markham example would be $10,475.

Ownership history, spouse or co-buyer circumstances, residency requirements and the principal-residence conditions matter. Ask your lawyer to calculate the actual refund and whether it can be claimed at registration.

Use the municipality on the title

A listing marketed as ‘Toronto area’ may be outside the City of Toronto. Confirm the legal address and municipality. If a buyer is subject to a non-resident speculation tax, that is a separate calculation from the ordinary transfer tax.

Compare the closing tax across a municipal boundary

Imagine comparing two $900,000 resale homes, one within Toronto and the other in Markham. Start with a buyer who is not assuming a first-time refund. In the earlier illustration the Ontario tax is $14,475 for each. The Toronto home adds another $14,475 in municipal land transfer tax before applicable rebates, while the Markham home is outside the Toronto charge. A comparison based only on the equal purchase prices would miss that difference in cash needed at registration.

Now ask the lawyer for an eligible-refund scenario based on the actual names on title. Keep the amounts separate, even if they are both collected at closing. A different purchase price, a higher-value Toronto property, mixed use, a special ownership structure or a non-resident purchaser can change which rules apply. The worked figure is a starting point for two straightforward residential purchases.

What to check before deciding

Confirm the legal municipality

Use the legal address and municipality from the agreement, property records or tax bill. Similar marketing names in the GTA can describe homes on different sides of a city line. Test this part of the plan under less favourable conditions. Ask the lawyer to confirm the location before calculating the municipal tax, and check whether the correct property type is selected in an estimate.

Using a nearby postal code or advertised neighbourhood can lead you to include a tax that does not apply or leave one out of the cash budget. Choose a response you can carry out before you reach the deadline. Keep the municipality on the first line of your two-property comparison, together with the proposed price and date.

Use the brackets in order

Land transfer tax generally applies in bands. A higher rate above one threshold is applied to the relevant portion, and the earlier portions keep their applicable rates. Use the current Ontario schedule and, for Toronto, its own schedule. Ask for a line-by-line estimate if the value is close to a material threshold.

Applying the top rate to the entire price can materially overstate the tax. Assuming the two schedules are identical at every price can also give the wrong result. Update the estimate if the negotiated price changes. Carry each tax and potential rebate as its own line rather than one bundled percentage.

Verify first-time eligibility for everyone on title

The person contributing the down payment, the person signing the mortgage and the people taking title are not necessarily the same. Give the lawyer the full ownership plan. Get a comparable figure or document before changing the plan. Share any previous property ownership, including outside Canada, marital circumstances, expected occupancy and the proposed ownership shares.

If only some purchasers qualify, a full advertised rebate may not be available. The Ontario and Toronto programs each need their own eligibility check. Use the result to decide where you need more time. Budget at least one scenario without any unconfirmed refund. Ask the lawyer whether the confirmed amount can be applied directly at registration.

Screen for additional buyer-specific taxes

A tax on certain non-resident purchases is distinct from ordinary transfer tax, and a federal purchase exception does not settle a provincial or municipal tax question. Ask the lawyer to identify which rules apply at the actual address to each intended purchaser. Provide citizenship or residency information securely to the lawyer as requested.

A buyer who budgets only for the usual transfer tax can face a serious cash gap if a separate tax applies. Do not assume status from the type of financing. Confirm the estimate before signing an unconditional agreement. The work-permit and purchase rules guide explains which questions to ask separately.

Carry the number into the whole comparison

Treat transfer tax as an upfront purchase cost in both your closing budget and any rent-versus-buy comparison. It is separate from annual property tax and recurring fees. Make the assumption explicit in your notes. Add the lawyer’s estimated charges and likely adjustments, and check cash remaining after down payment. Test a different purchase price or municipality with the same worksheet.

The lowest tax bill does not tell you which home fits your family if the commute, maintenance, purchase price or carrying cost is materially different. Compare the result against the amount or risk you can actually carry. Decide what cash you want left on the day you get the keys. Bring both calculations to the lender and lawyer before finalizing the offer budget.

Follow-up questions

Can I use the same estimate for every Toronto home?

Use the actual price, property classification, effective rates and buyer eligibility. The example in this guide helps you see the two layers and the bracket method. A lawyer should check the exact assessment, especially for a higher-value purchase, a non-standard ownership structure or any transaction involving a separate purchaser tax.

How should I compare a Toronto home with a York Region alternative?

Make two separate cash estimates at the proposed prices. Add commuting, taxes and fees to a monthly comparison, and compare homes of a similar type and condition. One location may require more cash at closing but suit your weekly routine better. Decide which figures are firm and which need checking.

To keep the calculation useful, write the source of each tax rate, the date checked and the name of the person who verified any rebate. Then move the final numbers into the closing-cost worksheet.