If you are purchasing a home in Toronto, land transfer tax is already one of the largest closing costs to plan for. Now, buyers in the city’s higher price ranges will need to factor in additional costs.

The City of Toronto has introduced new graduated municipal land transfer tax (MLTT) brackets for higher-value residential real estate transactions. Starting April 1st, 2026, the changes will apply to homes priced above $3 million and increase the municipal tax rate applied to the portions of a purchase price that fall within those higher ranges.

Land transfer tax is paid when a property changes ownership. Buyers purchasing property in Toronto pay two versions of this tax: the provincial land transfer tax that applies across Ontario and an additional municipal land transfer tax charged by the City of Toronto.

Because of this additional municipal tax, buyers in Toronto already face higher closing costs than buyers in other parts of the province. The newly introduced brackets increase the municipal tax rate on higher-priced homes, meaning buyers purchasing properties above $3 million will see higher tax amounts at closing.

New municipal land transfer tax brackets

The updated municipal tax rates apply to residential transactions above $3 million and are structured in graduated tiers. The full MLTT structure now includes the following brackets:

  • Up to and including $55,000: 0.5%
  • $55,000 to $250,000: 1.0%
  • $250,000 to $400,000: 1.5%
  • $400,000 to $2,000,000: 2.0%
  • $2,000,000 to $3,000,000: 2.5%
  • $3,000,000 to $4,000,000: 4.40%
  • $4,000,000 to $5,000,000: 5.45%
  • $5,000,000 to $10,000,000: 6.50%
  • $10,000,000 to $20,000,000: 7.55%
  • Over $20,000,000: 8.60%

Like other graduated tax systems, these rates apply only to the portion of the purchase price that falls within each bracket rather than to the full value of the property.

Example: $4 million home purchase

Consider a home purchased for $4,000,000 in Toronto.

Under the new municipal land transfer tax structure, the tax would be applied progressively across different portions of the purchase price:

  • $0 – $55,000 at 0.5% = $275
  • $55,000 – $250,000 at 1.0% = $1,950
  • $250,000 – $400,000 at 1.5% = $2,250
  • $400,000 – $2,000,000 at 2.0% = $32,000
  • $2,000,000 – $3,000,000 at 2.5% = $25,000
  • $3,000,000 – $4,000,000 at 4.40% = $44,000

Total municipal land transfer tax: $105,475

Because Toronto buyers must also pay the Ontario provincial land transfer tax, the provincial portion would add approximately $80,475 on a $4 million purchase.

This brings the combined land transfer tax total to roughly $185,950 payable at closing.

You can calculate the Toronto MLLT of any property here.

Impact on High-Value Transactions

Toronto remains the only municipality in Ontario that charges its own municipal land transfer tax in addition to the provincial tax. This means buyers purchasing homes within the city must account for both taxes when calculating closing costs.

For properties priced above $3 million, the new brackets increase the municipal tax payable on the higher portions of the purchase price. As property values increase through the new tiers, the applicable tax rates also increase.

The impact will be most noticeable in the luxury housing segment, where purchase prices often exceed several million dollars. In these cases, the additional municipal tax rates will apply progressively as the purchase price moves through the new brackets.

Considerations for Buyers and Sellers

The introduction of these brackets adds another cost consideration for buyers entering the luxury segment of Toronto’s housing market. Land transfer taxes are typically due at closing and must be paid upfront.

For buyers purchasing properties above $3 million, the revised tax structure means a larger portion of the purchase price will now fall into higher municipal tax tiers. This change increases the total land transfer tax payable at closing and may influence budgeting for high-value residential transactions in Toronto.