Land Transfer Tax: Toronto vs the 905

Two identical homes, same price, a few kilometres apart — yet one buyer pays thousands more in land transfer tax. The reason is geography: buy inside the City of Toronto and you pay a municipal land transfer tax on top of the provincial one, while buyers in the surrounding 905 region pay the provincial tax only. This guide shows the real dollar difference and how first-time buyers can shrink it.

Key takeaways

• Everyone buying in Ontario pays the provincial land transfer tax on a sliding scale.
• Toronto buyers pay a second, municipal land transfer tax (MLTT) that roughly doubles the bill.
• On an $800,000 home, the Toronto buyer pays about $12,475 more than a 905 buyer.
• First-time buyers can claim up to $4,000 provincial and, in Toronto, up to $4,475 municipal in rebates.
• HOMEH gives eligible buyers the industry's highest Cashback Rebate — far more than the double tax costs.

Why Toronto buyers pay twice

Every property purchase in Ontario triggers the provincial Land Transfer Tax (LTT), calculated on a marginal sliding scale. The City of Toronto is the only municipality in Ontario that also charges its own Municipal Land Transfer Tax (MLTT), which closely mirrors the provincial brackets up to $3 million. So a Toronto buyer effectively pays the same tax twice — once to the province and once to the city.

The "905" is shorthand for the area code covering the suburbs around Toronto — Mississauga, Vaughan, Markham, Brampton, Oakville and more. Those cities have no municipal land transfer tax, so buyers there pay the provincial LTT only. For the full mechanics, see our guides to the Ontario land transfer tax and the Toronto municipal land transfer tax.

The provincial brackets

The provincial tax applies to every Ontario buyer, in Toronto or the 905. It's marginal, meaning each band of the price is taxed at its own rate:

Toronto's municipal tax mirrors these same rates up to $3 million, with extra luxury tiers above that. To learn how the math works band by band, read how land transfer tax is calculated.

Toronto vs the 905: the real numbers

Here's the side-by-side cost on three common price points. The 905 column is the provincial tax alone; the Toronto column adds the matching municipal tax.

On an $800,000 home, the Toronto buyer pays roughly $12,475 more than the 905 buyer — purely because of the city border. Get a precise figure for any address with the HOMEH Closing Cost Calculator.

How first-time buyers cut the bill

First-time buyers get a provincial rebate of up to $4,000. Toronto first-time buyers also get a municipal rebate of up to $4,475 — so the double tax stings less if you qualify. We break down eligibility in do first-time buyers pay land transfer tax and the full land transfer tax rebate guide.

The border matters most for first homes

Because the rebates are capped, the Toronto-vs-905 gap grows as prices rise. Above roughly $400,000, a first-time buyer's rebates no longer fully cancel the municipal tax in Toronto.

Don't forget the rest of your closing costs

Land transfer tax is the biggest line item, but not the only one. Budget for legal fees, title insurance and inspections too — the full picture is in our pillar guide to closing costs in Ontario.

Cashback that dwarfs the double tax

Even Toronto's higher land transfer tax is small next to HOMEH cashback. Eligible buyers receive the industry's highest Cashback Rebate. Estimate yours with the cashback calculator or check your full bill with the closing cost calculator.