Is There A Luxury Land Transfer Tax in Toronto?

Yes, Toronto applies a municipal Luxury Land Transfer Tax with higher rates on homes priced above $2 million, layered on top of Ontario’s provincial tax.

Toronto is one of the only Canadian cities with its own municipal land transfer tax, which mirrors the provincial Land Transfer Tax but applies separately. In 2024, the City introduced new “luxury brackets” for properties with up to two single-family residences. Homes priced between $2 million and $3 million are taxed at 3.5% municipally, and rates step up progressively to as high as 7.5% for properties above $20 million. This means that a $3 million detached home in central Toronto could trigger more than $200,000 in combined provincial and municipal land transfer taxes at closing.

For comparison, consider two common purchase scenarios. An average downtown condo at $700K would generate roughly $20,000 in total land transfer tax. In contrast, a detached home priced at $3M in Rosedale, Forest Hill, or the Kingsway could generate more than ten times that amount in combined provincial and municipal tax. While condos remain relatively accessible in terms of closing costs, Toronto’s detached homes, where the TRREB average is already over $1.5M, are far more affected by these new “luxury” brackets.

This tax has a direct impact on affordability and investor returns. Higher closing costs can deter some buyers and reduce liquidity at the top end of the market. Sellers of luxury homes must account for this in pricing and negotiations, while buyers need to budget well beyond down payments and mortgage qualification.

At Fox Marin Associates, we guide clients through these realities, helping them model the total cost of ownership, including land transfer taxes, mortgage rules, and ongoing property expenses. With more than 1,000 successful transactions, over $580 million in sales, and 450+ five-star reviews, the Fox Marin Real Estate Team ensures that Toronto investors and luxury buyers make informed, confident decisions in a complex tax landscape.

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