What Is the Land Transfer Tax?

The land transfer tax (sometimes called the property transfer tax or welcome tax) is a fee you pay when you take legal ownership of a property. It’s a percentage of the home’s purchase price and must be paid upfront, often on closing day. While it may seem like just another line item, it can cost you thousands — especially in hot housing markets.

To help first-time home buyers, some provinces and even cities offer rebates to offset this cost.

Ontario Land Transfer Tax Refund (Provincial)

Ontario offers up to $4,000 in rebates for first-time buyers. To qualify, you must:

• Be at least 18 years old
• Have never owned a home or an interest in a home anywhere in the world
• Ensure your spouse has also never owned a home while being your spouse
• Occupy the home as your principal residence within 9 months
• Be a Canadian citizen or permanent resident (or become one within 18 months)
• Apply within 18 months of registering the property

If your home costs less than $368,000, you’ll get the full refund. If it’s more than that, you’ll get a partial refund.

Toronto Land Transfer Tax Rebate (Municipal)

Toronto has its own land transfer tax and rebate program on top of Ontario’s. You can claim up to $4,475 as a first-time buyer. The eligibility criteria are almost identical to Ontario’s:

• At least 18 years old
• You (and your spouse) have never owned a home
• Must live in the home within 9 months
• Must be a Canadian citizen or permanent resident
• Application must be made within 18 months
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• Good news: you can receive both the Ontario and Toronto rebates, potentially saving you more than $8,000.
  
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• How to Apply for the Land Transfer Tax Rebate?
• You submit a refund request with your lawyer during closing, or apply through the Ontario Ministry of Finance.
  
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