If you buy a home for more than $3 million inside the City of Toronto, your closing costs went up on April 1, 2026. Toronto raised the luxury tiers of its municipal land transfer tax, which applies on top of Ontario's provincial tax. For buyers looking at Forest Hill, the Bridle Path, Lawrence Park or Rosedale, this is now one of the largest single costs of the purchase.
What changed on April 1, 2026?
Toronto's municipal land transfer tax uses marginal brackets, like income tax: each rate applies only to the part of the price that falls inside its bracket. Nothing changed below $3 million. Above $3 million, every luxury bracket went up by roughly one percentage point:
| Portion of price | Before April 1, 2026 | From April 1, 2026 |
|---|---|---|
| $3M to $4M | 3.5% | 4.40% |
| $4M to $5M | 4.5% | 5.45% |
| $5M to $10M | 5.5% | 6.50% |
| $10M to $20M | 6.5% | 7.55% |
| Over $20M | 7.5% | 8.60% |
The luxury brackets apply to homes with one or two single-family residences. Ontario's provincial land transfer tax is separate and still tops out at 2.5% on the portion of a home's price above $2 million.
What does this mean in dollars?
Here is the combined provincial and Toronto tax on a few typical luxury prices, before any rebates:
- $3.5 million: about $73,975 provincial plus $83,475 Toronto, for roughly $157,450 in total. The Toronto portion is about $4,500 more than under the old rates.
- $4 million: about $86,475 provincial plus $105,475 Toronto, for roughly $191,950. That is about $9,000 more than before.
- $6 million: about $136,475 provincial plus $224,975 Toronto, for roughly $361,450. That is about $28,500 more than before.
These are estimates for illustration. Your real estate lawyer calculates the exact amount, which is paid on closing.
How does this compare with Vaughan, King City or Oakville?
Outside Toronto there is no municipal land transfer tax, so buyers pay only the provincial tax. On a $4 million home, that is about $86,475 in Kleinburg, King City or Oakville compared with about $191,950 in Forest Hill or the Bridle Path: a difference of more than $105,000 on the same price.
That gap doesn't make one area a better choice. Lifestyle, schools, commute and long-term value matter far more over the years you own a home. But it should be part of the budget from the start, especially if you are deciding between a Toronto neighbourhood and an estate area just outside the city.
Can I avoid or reduce it?
Generally, no. The tax is based on the price paid, and there is no luxury exemption. Toronto's first-time buyer rebate is capped at $4,475, so it makes little difference at these prices. A few practical points still help:
- Know the bracket edges. Because the rates are marginal, a price just over $4 million or $5 million only pays the higher rate on the amount above the threshold. Don't overpay to avoid a bracket, but understand the real cost of each extra dollar you offer.
- Separate chattels carefully. Items such as furniture can be listed separately in an agreement, but they must be valued honestly. Talk to your lawyer before doing this.
- Plan your cash. Land transfer tax generally can't be added to your mortgage. Make sure the funds are available on closing day.
How I help luxury buyers plan for it
Before we view homes, I prepare an estimate of every closing cost for your price range, including both land transfer taxes, legal fees and adjustments. If you are comparing Toronto with Kleinburg, King City or Oakville, I show you the full cost side by side so the decision is based on the complete picture.
Common questions
Did Toronto's land transfer tax change in 2026?
Yes. From April 1, 2026, Toronto raised its municipal land transfer tax rates on the portion of a home's price above $3 million. Rates below $3 million did not change.
Do I pay Toronto land transfer tax in Vaughan or Oakville?
No. The municipal tax applies only inside the City of Toronto. Buyers elsewhere in Ontario pay only the provincial land transfer tax.
Can land transfer tax be added to my mortgage?
Generally no. It is paid on closing, so plan for it from your savings or other funds.
Alexey Kopeykin, Sales Representative, Zolo Realty Brokerage Inc. Published October 2026. General information, not legal or tax advice; confirm details for your situation.