Toronto Closing Costs for First-Time Buyers: Land Transfer Tax, Rebates and What to Budget

The short answer: when you buy a home in the City of Toronto, you pay two land transfer taxes at closing, one to Ontario and one to the City. Eligible first-time buyers can get up to $4,000 back from Ontario and up to $4,475 back from Toronto, or $8,475 combined. On top of that, budget for legal fees, title insurance, a home inspection, property tax and condo fee adjustments, and, if you put down less than 20%, the 8% Ontario sales tax on your mortgage insurance premium, which must be paid in cash.

This guide is written by The Starke Group (TSG), Brett Starke's Toronto real estate team at RARE Real Estate Inc. It pulls together official guidance from the Government of Ontario, the City of Toronto, the Canada Revenue Agency (CRA), Canada Mortgage and Housing Corporation (CMHC) and the Financial Consumer Agency of Canada (FCAC). Rates and rules were checked in November 2026. It is general information, not legal, tax or mortgage advice.

What closing costs do Toronto buyers pay?

Closing costs are one-time amounts paid on top of your down payment, usually by closing day. FCAC suggests setting aside 1.5% to 4% of the purchase price for these costs. In Toronto, where buyers pay two land transfer taxes, run the actual numbers rather than relying on a rule of thumb. The main items:

• Ontario land transfer tax, paid on every purchase in the province.
• Toronto municipal land transfer tax (MLTT), paid on purchases inside City of Toronto limits, plus a City administration fee on each MLTT transaction.
• Legal fees and disbursements for your real estate lawyer, who handles the title search, registration and closing funds.
• Title insurance, often arranged through your lawyer.
• Home inspection, if you choose to have one done.
• Adjustments on the statement of adjustments, such as property taxes or condo fees the seller has already prepaid.
• Sales tax on mortgage insurance, if your down payment is under 20%.
• Moving and set-up costs, such as movers and home insurance.

How much is land transfer tax in Toronto?

Ontario and Toronto use the same rate brackets for most homes up to $2 million. According to Ontario's land transfer tax guide and the City of Toronto's MLTT rates page, each tax is calculated in layers:

• 0.5% on the first $55,000
• 1.0% on the portion from $55,000 to $250,000
• 1.5% on the portion from $250,000 to $400,000
• 2.0% on the portion from $400,000 to $2,000,000
• 2.5% on the portion above $2,000,000 for homes with one or two single-family residences

For transactions registered on or after April 1, 2026, Toronto's MLTT on homes with one or two single-family residences rises to 4.40% on the portion from $3 million to $4 million, stepping up to 8.60% above $20 million. Ontario's top rate stays at 2.5%.

For a home priced between $400,000 and $2 million, a quick formula from Ontario is: price multiplied by 2%, minus $3,525. Because Toronto's brackets match in that range, the MLTT works out to the same amount. Before any rebate:

• $600,000: $8,475 Ontario plus $8,475 Toronto, or $16,950 in total.
• $900,000: $14,475 Ontario plus $14,475 Toronto, or $28,950 in total.
• $1,300,000: $22,475 Ontario plus $22,475 Toronto, or $44,950 in total.

Ontario bases the tax on the full value of the consideration, which can include upgrades on a new home. HST paid on the purchase price is not included.

What land transfer tax rebates can first-time buyers get?

You can claim both on the same purchase if you qualify.

• Ontario: a refund of up to $4,000. Ontario says this means no provincial tax on the first $368,000 of an eligible home's value.
• Toronto: a rebate of up to $4,475, according to the City of Toronto's MLTT rebate page. That equals the full MLTT on a $400,000 home. It applies to new and resale homes.

Using the examples above, an eligible first-time buyer would owe about $8,475 in total on a $600,000 condo, $20,475 on a $900,000 home and $36,475 on a $1.3 million home. Your lawyer can usually claim both rebates when the deed is registered, so the savings come off the tax owed on closing day.

Who counts as a first-time buyer for land transfer tax?

Ontario and Toronto use a stricter test than most federal programs. To qualify, you must:

• be at least 18 years old;
• never have owned a home, or an interest in a home, anywhere in the world, at any time;
• have a spouse who did not own a home anywhere in the world while they were your spouse;
• be a Canadian citizen or permanent resident (both governments give you 18 months after the transfer to become one and then apply);
• move in as your principal residence within nine months of the transfer.

If you buy with someone who is not a first-time buyer, Ontario reduces your refund to match your share. For example, a first-time buyer who buys 50/50 with a parent who already owns a home can claim up to half of the $4,000 maximum. Ask your lawyer how the City handles the same situation. If the rebate is not claimed at registration, you pay the full tax and then apply within 18 months. Toronto charges a $221.22 fee to process a rebate request made after registration.

By comparison, the federal programs below generally ask whether you lived in a home that you or your spouse or common-law partner owned in the current year or the previous four calendar years. You can qualify federally and still miss the Ontario and Toronto rebates.

What if my down payment is under 20%?

The federal minimum down payment is 5% on a home of $500,000 or less, then 10% on the portion from $500,000 to $1.5 million. Homes of $1.5 million or more need at least 20% down. With less than 20% down, you typically need mortgage loan insurance. Ottawa raised the insured mortgage price cap to $1.5 million and opened 30-year amortizations to first-time buyers on insured mortgages, effective December 15, 2024.

The premium can usually be added to your mortgage. The tax on it cannot. CMHC's premium table runs from 0.60% to 4.50% of the loan depending on your down payment, and CMHC notes that premiums in Ontario are subject to provincial sales tax that cannot be added to the loan. Ontario's retail sales tax rate on insurance premiums is 8%.

As an illustration, on a $600,000 home with the minimum $35,000 down, the loan is $565,000. At CMHC's 4.00% premium for that loan-to-value range, the premium is $22,600, and the 8% tax is $1,808, due in cash at closing. Your lender will confirm exact figures, and other insurers set their own premiums.

Are there other programs that help with the cash needed?

These federal programs each have their own rules, so confirm details with your financial institution or accountant.

• First Home Savings Account (FHSA): the CRA says your participation room is $8,000 in the first year you open one, with a $40,000 lifetime limit. Contributions are generally tax-deductible.
• Home Buyers' Plan (HBP): you can withdraw up to $60,000 from your RRSPs to buy a qualifying home. For a first withdrawal made from 2026 to 2028, repayments start in the fifth year after the withdrawal. You can combine it with an FHSA for the same home.
• Home buyers' amount: eligible first-time buyers can claim up to $10,000 on line 31270 of their tax return. It is a non-refundable credit that reduces federal tax owing.

Is it different if I buy a new home or pre-construction condo?

Yes, mainly because of HST. The CRA says the sale of a previously occupied home by someone other than a builder is generally exempt from GST/HST, with exceptions such as a substantially renovated home. New homes bought from a builder generally do carry HST, and the rebates have changed a lot recently:

• The federal first-time home buyers' GST/HST rebate covers 100% of the federal portion of HST on a new home valued up to $1 million, with a reduced rebate between $1 million and $1.5 million. It generally applies to agreements signed with a builder on or after March 20, 2025, and before 2031.
• Ontario says it has removed the full 8% provincial portion of HST for first-time buyers of new homes valued up to $1 million, for agreements from March 20, 2025, to December 31, 2030.
• Ontario also offers temporary enhanced relief to all eligible buyers of new homes used as a primary residence, for builder agreements from April 1, 2026, to March 31, 2027. It says homes valued at $1 million or less can receive full 13% HST relief, up to $130,000.

Eligibility depends on dates, price, construction timelines and use, so have your lawyer review the builder's agreement before you sign.

A first-time buyer's closing cost checklist

1. Get a mortgage pre-approval and ask your lender to estimate any insurance premium and the 8% tax on it.
2. Calculate both land transfer taxes at your target price, then subtract the rebates you qualify for.
3. Check your history against the Ontario and Toronto first-time buyer test, including your spouse's.
4. Line up a real estate lawyer early and ask for a written fee and disbursement estimate.
5. Budget for an inspection, title insurance, moving costs and, for a condo, any prepaid fees that will show up as adjustments.
6. Keep proof of citizenship or permanent residence and proof of your new address in case a rebate needs to be claimed after closing.

For help choosing an agent, see our practical checklist for choosing a Toronto realtor, and if you are looking at condos, our local guide to King West condo buildings.

Frequently asked questions

Do I pay land transfer tax twice in Toronto?
Yes. Homes inside City of Toronto limits pay both the Ontario tax and the City's MLTT.

How much can a first-time buyer save on land transfer tax in Toronto?
Up to $8,475 combined: up to $4,000 from Ontario and up to $4,475 from the City, if you meet both sets of rules.

I owned a home outside Canada years ago. Can I still get the rebates?
Not the Ontario or Toronto rebates, which require that you have never owned a home anywhere in the world. Federal programs with a four-year test may still apply.

Can mortgage insurance tax be added to my mortgage?
No. CMHC and FCAC both say the provincial sales tax on the premium cannot be added to the loan, so plan to pay it at closing.

Planning your first Toronto purchase?

If you are working out what you will need on closing day, we are happy to walk through the numbers with you for the homes you are considering. Connect with The Starke Group whenever you are ready.