As of April 1, 2026, Toronto charges a graduated Municipal Land Transfer Tax on the portion of a home's price above $3 million: 4.4% from $3M to $4M, 5.45% from $4M to $5M, 6.5% from $5M to $10M, 7.55% from $10M to $20M, and 8.6% above $20M. That is on top of the provincial Ontario Land Transfer Tax and the standard municipal tax you already pay. On a $5 million Toronto home, combined provincial and municipal land transfer tax now runs roughly $271,000, and the April change alone added close to $18,500 to that bill.
If you are buying or selling a home over $3 million in the City of Toronto, the math on your closing changed this spring, and it changed in your favour only if you understand it.
On December 17, 2025, City Council approved a new set of graduated luxury tax brackets inside the Municipal Land Transfer Tax. They took effect for any transfer that closes on or after April 1, 2026. This is one of the most common questions I am getting from buyers and sellers in the downtown core and north Toronto right now, so here is exactly how it works, what it costs, and where the decision points are.
Toronto is the only city in Ontario that charges its own land transfer tax on top of the provincial one. So a Toronto buyer pays two taxes at closing, not one. That was true before April, and it is still true now.
What changed is the top end. For a property containing one or two single-family residences, the portion of the price above $3 million is now taxed at these municipal rates:
These are graduated, which is the part people get wrong. You do not pay one flat rate on the whole purchase price. Each slice of the price is taxed at its own rate, the same way income tax brackets work. Only the dollars inside each band get that band's rate.
Before April 1, the luxury portion above $3 million started at 3.5% and topped out at 7.5%. The new brackets raised every luxury tier by roughly one percentage point. City staff project the change will bring in about $13.8 million in additional revenue.
Rates on a page do not mean much until you see them on a closing statement. Here is what combined provincial and municipal land transfer tax looks like on a freehold home in the City of Toronto, before any rebates:
The pattern is clear. The higher you go above $3 million, the larger the increase, because more of your purchase price sits in the higher brackets. Above $10 million and $20 million, the gap between the old and new rules runs into six figures.
One number worth sitting with: on that $5 million home, the same purchase in a neighbouring municipality like Markham would carry only the provincial tax, around $111,000, because there is no municipal land transfer tax outside Toronto. The roughly $160,000 municipal portion is the price of a City of Toronto address at the luxury level.
Here is where this gets practical for anyone buying or selling in Yorkville, Rosedale, Lawrence Park South, or the freehold pockets around the Annex and Davenport.
The jump to the 4.4% luxury rate happens the moment you cross $3 million. So homes priced just above that line are facing real downward pressure. A buyer looking at a home listed at $3.1 million knows that price triggers luxury rates on the top $100,000, and knows a slightly lower agreed price could keep the deal cleaner. That is a live negotiation point on the ground right now.
For sellers, this matters for pricing strategy. Pricing a home at $3,050,000 when the comparables support $2,975,000 can cost you buyer interest, because buyers are doing this math before they even book a showing. This is exactly the kind of question I walk sellers through before we set a list price, because the threshold effect is specific to your property and your competition.
TRREB has also flagged a slower-moving effect. Taxing $3 million-plus homes more heavily gives current owners another reason to stay put, which thins out move-up inventory over time. Fewer luxury listings coming to market can keep pressure on prices even as transaction volume cools. If you have been thinking about selling a high-end home, that supply picture is worth understanding for your own timing.
A few mechanics that catch buyers off guard, especially first-time luxury buyers moving up from a condo:
You pay in cash, at closing. Land transfer tax cannot be added to your mortgage or amortized over time. The full amount, both provincial and municipal, is due on closing day. Your real estate lawyer collects it and remits it to the province and the city. You need that money liquid and ready, separate from your down payment.
It is the largest single closing cost you will face. For context, your lawyer's fees will likely run $1,000 to $1,800 plus disbursements, and title insurance a few hundred dollars more. Land transfer tax dwarfs all of it. On a luxury purchase, it is the number that decides how much cash you actually need to close.
First-time buyer rebates barely move the needle at this level. Ontario offers up to $4,000 back and Toronto up to $4,475, for a combined $8,475. That is meaningful on an entry condo, and you can see how the new-build side works in our guide to the Ontario HST rebate on new homes. On a $4 million freehold, the rebate is a rounding error, and most move-up buyers do not qualify anyway.
If you are buying pre-construction rather than resale, your land transfer tax is calculated on final closing, not on the occupancy date, which is one more reason the condo occupancy and closing process is worth understanding before you sign.
None of this should stop a well-planned purchase or sale. The luxury land transfer tax is a cost, not a barrier, and Toronto's high end continues to trade on scarcity more than on speculation. Luxury listings are averaging around 52 days on market in 2026, and the broader GTA is sitting near balanced territory at about four months of supply, tighter than a year ago. For a sense of the wider picture, our read on why 2026 is a corner year for Toronto buyers puts the numbers in context.
What the new rules do reward is planning. Knowing your exact land transfer tax before you write an offer changes how you structure price, how much cash you set aside, and whether the $3 million threshold should shape your search. Your specific number depends on the property, whether it is freehold or condo, and whether it holds one or two residences, so the only way to know for sure is to run it against a real address.
Roughly $123,000 in combined provincial and municipal land transfer tax, before any rebates. At exactly $3 million you are right at the threshold, so the new luxury brackets have not yet applied. Every dollar above $3 million is where the higher 4.4% and up rates begin.
Yes. Toronto is the only municipality in Ontario that levies its own Municipal Land Transfer Tax on top of the provincial Ontario Land Transfer Tax. Both are due on closing day, both use graduated brackets, and your real estate lawyer collects and remits both.
No. Land transfer tax must be paid in full, in cash, on your closing date. It cannot be rolled into your mortgage or paid over time, so you need to budget it separately from your down payment.
The new graduated luxury brackets apply to properties containing one or two single-family residences, which is the freehold luxury market rather than most condos. For pre-construction, land transfer tax is calculated at final closing based on the purchase price, so the same brackets apply if the price and property type qualify.
What about non-resident buyers?Non-residents buying in Toronto face Ontario's 25% Non-Resident Speculation Tax plus a 10% municipal component, for a combined 35% on top of regular land transfer tax. If you are buying from outside Canada, this is a conversation to have with a lawyer before you offer.
Toronto's new luxury land transfer tax adds real money to any closing above $3 million, and the higher your price, the larger the bite. The buyers and sellers who come out ahead are the ones who know their exact number before they negotiate, not after.
If you are thinking through a luxury purchase or sale in Toronto, I am happy to walk you through the numbers on your specific property, including your full land transfer tax and closing costs. Reach out anytime at ryan@connect.ca, or send your details through this form and we will get back to you.
This article is general information, not tax or legal advice. Confirm the figures for your specific transaction with your real estate lawyer and accountant.
About Ryan Coyle
Ryan Coyle is a Toronto real estate broker and investor with more than 20 years in the industry and over $2 billion in real estate transactions. He personally holds a portfolio of 40+ doors and helps buyers, sellers, and investors build long-term wealth through Toronto real estate. Ryan leads Connect, a full-service GTA brokerage focused on the downtown core and north Toronto's luxury market. Learn more at connect.ca.
