May 21, 2026
Understanding Land Transfer Tax in Ontario
What you'll pay, what first-time buyers can claim back, and how to plan for it at closing.
Land transfer tax (LTT) is the surprise line item that catches more Ottawa first-time buyers off guard than any other. Here's exactly what you'll pay, what you can claim back, and how to plan for it.
Ontario's LTT uses a marginal-rate scale: 0.5% on the first $55,000, 1.0% on $55,001 to $250,000, 1.5% on $250,001 to $400,000, and 2.0% on $400,001 to $2,000,000 (with a 2.5% bracket above $2M on residential). The tax is calculated on the purchase price, not the mortgage amount, and it's paid by the buyer at closing through your real estate lawyer.
On a $650,000 Ottawa home, that works out to roughly $9,475 in provincial LTT. On an $850,000 home, about $13,475. Critically, Ottawa is NOT Toronto — there is no municipal land transfer tax in Ottawa, so you only pay the provincial portion. Buyers moving from Toronto often forget this and over-budget; buyers from outside Ontario often forget LTT exists at all and under-budget.
First-time buyers in Ontario get a refund of up to $4,000 of provincial LTT. To qualify, you must be 18+, occupy the home as your principal residence within nine months, and you (and your spouse, if applicable) must never have owned a home anywhere in the world. The refund is typically claimed by your lawyer at closing — you simply don't pay the first $4,000 of LTT — so on a home up to about $368,000, your provincial LTT is effectively zero.
Plan for LTT as part of your closing cash, not your down payment. Lenders won't lend you money to pay it, and it's due in certified funds on closing day. The most common mistake is stretching the down payment to maximize purchase price, then scrambling to find $10,000 for LTT 30 days before close.
If you're a non-resident buying in Ontario, the Non-Resident Speculation Tax (NRST) adds 25% on top of LTT for residential purchases province-wide. There are limited rebate paths for buyers who later become permanent residents or work-permit holders meeting specific criteria — talk to a real estate lawyer before writing an offer.
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