As your home purchase closing draws nearer, most of the stress and anxiety dissipates as you take the final steps towards homeownership. The same can’t be said for your wallet, however, as you’re then faced with numerous closing costs that need to be paid before your transaction is complete, with the largest being land transfer tax.
This tax, which is charged by the province, (with the exception of Ontario where the City of Toronto has its own additional tax), is determined based on the total purchase price of the property, and unlike the mortgage, it must be paid in cash.
Tax Amount Ranges by Average Home Price
Since land transfer tax is so intertwined with the home property price, it will increase and decrease alongside average home prices. As a result, land transfer tax will vary across Ontario’s major housing markets. For example, a buyer in the city of Toronto will be faced with an LTT of $27,521—which adds up to an additional 3.2% of the total home price, based on the September 2018 average of $864,275.