Closing costs in Canada: land transfer tax and what to budget

On an $800,000 Toronto purchase with 10% down ($80,000), a first-time buyer who qualifies for both provincial and municipal rebates should budget about $22,586 in closing costs beyond the down payment, including $1,750 in adjustments for prepaid property tax and utilities. A repeat buyer on the same property pays about $31,061 because the full $24,950 in combined land transfer tax applies with no rebate. Add your $80,000 down payment and total cash at the lawyer's office is roughly $102,600 for a first-time buyer or $111,100 for a repeat buyer, not counting moving costs. Monthly P&I on the insured mortgage at 5.10% is $4,360, separate from closing-day cash. This article itemizes where that money goes and how the tax brackets work, for buyers who have saved the down payment but have not yet budgeted the rest.

The scenario modeled

The worked example is an $800,000 resale home in Toronto, Ontario, with 10% down and CMHC insurance at the 3.10% premium tier. Mortgage P&I is modeled at 5.10% fixed; land transfer tax, CMHC premium math, and fixed closing fees are calculated directly from published rates.

Ontario provincial land transfer tax on $800,000 is $12,475. Toronto municipal land transfer tax uses the same brackets and adds another $12,475. First-time buyers who meet eligibility rules can claim rebates of up to $4,000 (provincial) and $4,475 (municipal), reducing net land transfer tax to $16,475.

The findings

Land transfer tax is the largest closing cost line item in Toronto. Legal fees, title insurance, and a home inspection add another $2,575 at typical mid-range estimates. CMHC provincial sales tax on the premium adds $1,786 in cash. Closing adjustments for prepaid property tax and utility credits the seller prepaid add $1,750 in this scenario; that figure moves up or down depending on your closing date relative to the seller's tax and utility billing cycle.

The CMHC premium of $22,320 is not in this table because it is rolled into the mortgage, not paid at closing. You will pay interest on it for the life of the loan. See our CMHC insurance guide for how that premium affects total borrowing cost. Monthly P&I at 5.10% on the $742,320 insured balance is $4,360, separate from closing-day cash. Load the scenario in the calculator to adjust the rate or down payment for your own quote.

Canadian context

Every province handles transfer taxes differently. British Columbia charges Property Transfer Tax at 1% on the first $200,000, 2% on $200,001 to $3,000,000, and 3% above that. On an $800,000 BC purchase, tax before exemptions is $14,000. First-time buyers may qualify for a partial exemption when the fair market value is under $860,000 (registered on or after April 1, 2024); at $800,000 the exemption reduces tax by $8,000, leaving $6,000 payable. Quebec charges a welcome tax (droits de mutation) on a different bracket structure entirely.

Ontario and Toronto first-time buyer rebates require Canadian citizenship or permanent residency, no prior home ownership anywhere in the world, and occupancy as a principal residence within nine months of closing. Your lawyer applies for rebates at registration.

Source: Ontario Ministry of Finance, "Calculating Land Transfer Tax," accessed May 2026. URL: https://www.ontario.ca/document/land-transfer-tax/calculating-land-transfer-tax

When this applies - and when it doesn't

This scenario applies when: You are buying in Toronto with less than 20% down on a property under $1,000,000 and trying to estimate total cash required at closing. The $800,000 price point sits in the 2.0% LTT bracket where Toronto's double tax hits hardest in dollar terms.

The numbers change if:

You buy outside Toronto city limits. You pay Ontario provincial land transfer tax only, not the municipal layer. On $800,000 in Ottawa or Hamilton, land transfer tax is $12,475, not $24,950 before rebates.

You are in British Columbia or Quebec. Property Transfer Tax or welcome tax replaces Ontario LTT entirely. BC first-time buyer exemptions follow different thresholds and phase-out rules than Ontario rebates.

You are not a first-time buyer. The full $24,950 in combined Toronto land transfer tax applies with no rebate, adding $8,475 to closing costs compared to an eligible first-time buyer on the same purchase.

You buy new construction. GST or HST may apply on new homes, with a partial rebate on qualifying new builds. Resale homes like the one modeled here are exempt from GST/HST on the purchase price itself.

This scenario does not apply if you already own 20% or more in equity and are refinancing rather than purchasing. Land transfer tax is triggered by a change in ownership on title, not by renewing or refinancing an existing mortgage with the same owner.