First-Time Home Buyer Land Transfer Tax: What You Need to Know
Buying your first home is an exciting milestone, but it also comes with unexpected costs—including land transfer tax. If you’re a first-time home buyer in Ontario, you may qualify for a land transfer tax rebate that can save you thousands.
In this guide, we’ll cover how land transfer tax works, how much you’ll pay, and how to claim your rebate.
What Is Land Transfer Tax?
When you buy a home in Ontario, you must pay land transfer tax (LTT) upon closing. This tax is based on the purchase price of the property and is due at the time of registration.
📌 Ontario’s Land Transfer Tax Rates (as of 2024):
| Purchase Price of Home | Tax Rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000 – $250,000 | 1.0% |
| $250,000 – $400,000 | 1.5% |
| $400,000 – $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
Example:
- If you purchase a home for $500,000, your land transfer tax would be $6,475.
- However, first-time home buyers may qualify for a rebate to reduce this cost.
Do First-Time Home Buyers Pay Land Transfer Tax in Ontario?
Yes, but you may be eligible for a refund of up to $4,000 if you meet certain requirements.
💡 First-time buyers in Toronto also pay a municipal land transfer tax, but there’s a separate rebate of up to $4,475, meaning Toronto buyers can save up to $8,475 total.
See the Ontario government’s official land transfer tax refund page
Land Transfer Tax Rebates for First-Time Buyers
Who Qualifies for the First-Time Home Buyer Refund?
To qualify for the Ontario Land Transfer Tax Refund, you must:
✅ Be at least 18 years old
✅ Be a Canadian citizen or permanent resident
✅ Live in the home as your primary residence within 9 months of purchase
✅ Have never owned a home anywhere in the world
✅ Have a spouse who has never owned a home while being your spouse
Important: If you co-purchase a home with someone who is not a first-time buyer, you’ll only receive a partial refund based on your share of ownership.
How Much Can You Get?
📌 Ontario Land Transfer Tax Refund Amounts:
- If your home costs $368,000 or less, you will receive a full refund (up to $4,000), meaning you pay no LTT.
- If your home is more than $368,000, you will receive the maximum refund of $4,000, but must pay any remaining tax balance.
🔗 Use this Ontario land transfer tax calculator to estimate your tax
How to Apply for the Rebate
You can claim the rebate directly at closing or apply for a refund afterward.
🔹 If registering electronically → Your lawyer will include the rebate claim when submitting your documents.
🔹 If registering manually → Submit an Ontario Land Transfer Tax Refund Affidavit to the Ministry of Finance.
Download the refund affidavit form here
Additional Closing Costs to Consider
Land transfer tax isn’t the only upfront cost when buying a home. Make sure to budget for:
📌 Closing Costs for First-Time Buyers:
💰 Home Inspection – $300 to $600
💰 Legal Fees & Title Insurance – $1,500+
💰 Mortgage Default Insurance – If your down payment is less than 20%
💰 Moving Costs – $500 to $2,000
🔗 See more closing costs first-time buyers should know
Final Thoughts & Next Steps
Understanding land transfer tax and the available rebates can save you thousands when buying your first home.
✅ Next Steps for First-Time Buyers:
🔹 Use a land transfer tax calculator to estimate your costs
🔹 Check your eligibility for the rebate
🔹 Work with a real estate expert to guide you through the home-buying process
💬 Have questions about buying your first home? Contact me today to start your journey!
🔗 Useful Resources
✅ Ontario Land Transfer Tax Refunds for First-Time Buyers
✅ Ontario Land Transfer Tax Calculator
✅ Toronto First-Time Buyer Land Transfer Tax Rebate
✅ Apply for an Ontario Land Transfer Tax Refund