What is land transfer tax?
Land transfer tax is a provincial tax levied in Ontario on the transfer of real property ownership, calculated as a percentage of the purchase price and paid by the buyer at closing.
Ontario's land transfer tax is a provincial tax payable when you purchase real property within the province. The tax is calculated on the purchase price of the property and is typically due at closing. The tax rate increases incrementally based on the sale price, meaning higher-priced properties pay a higher percentage rate.
For buyers working with residential sales agents, understanding this tax is important because it represents a material closing cost. The tax must be paid to Land Titles Ontario before the deed can be registered in your name.
First-time home buyers in Ontario may qualify for a rebate that reduces or eliminates the land transfer tax liability on the purchase of a principal residence, provided the property meets eligibility requirements (such as price limits and being your first home purchase). This rebate does not apply to commercial property, vacant land, or subsequent residential purchases.
The tax applies to both freehold and condominium purchases across London and throughout Ontario. It is separate from federal Goods and Services Tax (GST) considerations and municipal property tax. Your lawyer or real estate agent can help calculate the exact amount owing based on your specific purchase price and buyer status.