Land Transfer Tax

A land transfer tax (LTT) is a provincial tax imposed on the transfer of real property — land and buildings — from one owner to another. The buyer pays LTT (not the seller) at the time of closing, when the deed is registered. LTT is calculated as a percentage of the purchase price using a tiered rate structure — lower rates on the first portion of the price and higher rates as the price increases. Some provinces call it a "deed transfer tax" or "property transfer tax." In Toronto, an additional Municipal Land Transfer Tax (MLTT) applies on top of Ontario's provincial LTT — effectively doubling the tax for Toronto purchases. See Ontario.ca — Land Transfer Tax.

Ontario provincial LTT rates (2027): (1) 0.5% on the first $55,000; (2) 1.0% on $55,001–$250,000; (3) 1.5% on $250,001–$400,000; (4) 2.0% on $400,001–$2,000,000; (5) 2.5% above $2,000,000. Example — $700,000 home: ($55,000 × 0.5%) + ($195,000 × 1%) + ($150,000 × 1.5%) + ($300,000 × 2%) = $275 + $1,950 + $2,250 + $6,000 = $10,475. Toronto MLTT applies at the same rates — doubling the total to approximately $20,950. First-time buyers can claim rebates of up to $4,000 (provincial) and $4,475 (Toronto). See Canada LTT rebate guide.

BC calls it the Property Transfer Tax (PTT) with these 2027 rates: (1) 1% on the first $200,000; (2) 2% on $200,001–$2,000,000; (3) 3% on $2,000,001–$3,000,000; (4) 5% above $3,000,000. Example — $900,000 home: ($200,000 × 1%) + ($700,000 × 2%) = $2,000 + $14,000 = $16,000. BC additional PTT: non-residents of BC pay an additional 20% on properties in Metro Vancouver, Fraser Valley, Capital Regional District, and other areas. First-time buyers can access the First-Time Home Buyers' Program: full exemption on homes up to $500,000. See BC Government — Property Transfer Tax.

Four provinces have no provincial land transfer tax on residential properties: (1) Alberta: only a small land title registration fee based on property value and mortgage amount — typically $300–$1,200; (2) Saskatchewan: land title transfer fee only (similar to Alberta); (3) Rural Manitoba: no provincial LTT (Winnipeg has its own 0.5%–2% municipal LTT); (4) Yukon, NWT, Nunavut: no LTT. Alberta is frequently cited as having lower transaction costs for homebuyers — one reason Calgary and Edmonton attract home purchases from higher-tax provinces. New Brunswick and Nova Scotia have "deed transfer taxes" set by municipalities at 0.5%–1.5% of the purchase price — not provincial LTT but similar in effect. See Canada land transfer tax 2027.

Land transfer tax must be paid in cash at closing — it cannot be included in the mortgage. The buyer's lawyer collects it from the buyer's funds at closing and remits it to the provincial government when registering the deed transfer. This means LTT is a significant closing cost to budget for separately from the down payment. For a $700,000 Toronto purchase, LTT can add $20,000+ to closing costs. CMHC mortgage insurance premiums (on purchases with less than 20% down) can be added to the mortgage, but LTT cannot. When planning home purchase finances, always calculate LTT separately and ensure you have sufficient liquidity. Use the Canadian mortgage calculator to model your total purchasing cost including LTT.