Toronto Raises Land Transfer Tax for Some Homes

The City of Toronto has hiked the land transfer tax on higher-value properties.

Effective April 1, homes that sell for more than $3 million will pay a significantly higher rate.

The new graduated land transfer tax for luxury properties moves to 4.4% from 3.5% on homes sold between $3 and $4 million. This increases to up to 8.6% for homes valued at $20 million or more.

The change will greatly affect overall closing costs. For example, on a $5 million home, the municipal land transfer tax will be approximately $159,975 — an $18,500 increase from the previous rate of 5.5%.

Prior to 2024, when the rate was 2.5% of the value of the property in excess of $2 million, the same home would have been taxed $111,475, amounting to an increase of $48,500 in just two years.

When combined with the provincial portion, a buyer of a $5 million home must now budget for $271,450 in total land transfer taxes.