Who Pays Land Transfer Tax in Ontario? Ottawa Buyer Guide

Who pays land transfer tax in Ontario? In a typical Ottawa home purchase, the buyer pays Ontario land transfer tax when the property is transferred into their name. The seller normally does not pay this tax. Your real estate lawyer calculates and arranges payment as part of closing. Some transfers qualify for exemptions or refunds, so confirm the amount for your transaction with your lawyer.

When Do Ottawa Homebuyers Pay Land Transfer Tax?

Ontario land transfer tax is generally payable when the transfer of the property is registered. Buyers usually provide their lawyer with the required closing funds in advance. Budget for this tax separately from the down payment, legal fees, title insurance, property tax adjustments, home inspection and moving expenses.

Ottawa does not currently charge an additional municipal land transfer tax of the kind charged in Toronto. For a typical Ottawa purchase, calculate Ontario provincial land transfer tax; special rules or other taxes may apply depending on the transaction.

How Much Is Ontario Land Transfer Tax?

For most recent residential purchases, Ontario uses marginal rates rather than applying one rate to the full purchase price:

• 0.5% on the first $55,000;
• 1% on the portion from $55,000 to $250,000;
• 1.5% on the portion from $250,000 to $400,000;
• 2% on the portion above $400,000; and
• 2.5% on the portion above $2 million for property containing one or two single-family residences.

These bands describe the standard provincial calculation for applicable agreements and registrations; unusual transfers can be treated differently. See the Government of Ontario’s land transfer tax calculation guide for the official rates and exceptions.

Example: Land Transfer Tax on a $600,000 Ottawa Home

For a buyer who qualifies for the full $4,000 Ontario first-time homebuyer refund, the net provincial land transfer tax in this example would be $4,475. Eligibility must be confirmed; not every first-time purchaser receives the full amount.

Do First-Time Homebuyers Pay Land Transfer Tax in Ontario?

Yes. Eligible first-time buyers may receive a provincial refund of up to $4,000, which can reduce the amount payable. Qualification involves conditions such as age, occupancy, prior ownership and, where applicable, a spouse’s ownership history. Canadian citizenship or permanent-resident requirements can also affect eligibility and timing. Your lawyer can explain whether the refund can be claimed at registration or must be requested afterward.

The Ontario government generally requires a refund application within 18 months of registration or the relevant disposition. Read the official first-time homebuyer refund requirements rather than assuming that being a first-time buyer automatically removes the tax.

For a broader explanation of financing and assistance, see our Ottawa first-time homebuyer guide.

Who Pays Land Transfer Tax When Buying or Selling?

In a standard Ontario resale transaction, the purchaser is responsible. The seller usually has separate expenses, such as legal fees, mortgage discharge costs and, where applicable, real estate brokerage compensation. A buyer should not assume that the seller will pay provincial land transfer tax unless a qualified lawyer has reviewed an unusual agreement or transaction structure.

Some transfers between family members, estates, corporations or spouses involve special rules; do not assume they are automatically tax-free. Certain non-resident buyers may also face Ontario’s Non-Resident Speculation Tax in addition to ordinary land transfer tax. Ask a qualified Ontario real estate lawyer about exemptions, tax consequences and any restrictions relevant to your circumstances.

How Does Land Transfer Tax Fit Into Your Closing Budget?

Land transfer tax is only one part of the cash required to close. Buyers should account for their down payment, lawyer’s fees, title insurance, inspections if applicable, adjustments and moving costs. If your down payment is below 20%, mortgage default insurance can also apply, with tax on applicable insurance premiums potentially payable at closing.

For a practical worked purchase budget, see How Much Does It Cost to Buy a House in Ottawa?. For the transaction timeline, see Navigating the Real Estate Closing Process in Ontario.

Frequently Asked Questions

Does the seller pay land transfer tax in Ottawa?

Usually no. The buyer normally pays Ontario land transfer tax when ownership is transferred. Sellers generally have their own separate closing expenses.

Is Ottawa land transfer tax different from Toronto?

Ottawa homebuyers generally pay Ontario provincial land transfer tax only. Toronto also has a municipal land transfer tax, which changes the calculation for properties in that city.

Can the land transfer tax be rolled into a mortgage?

Most buyers should plan to have the tax available as part of their closing funds. Do not assume a lender will finance it; ask your mortgage professional about your specific financing arrangements.

Can a first-time buyer avoid paying Ontario land transfer tax?

Eligible buyers may receive up to a $4,000 refund. That may eliminate the provincial tax on some lower-priced homes, but higher-priced purchases can still leave a balance.

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I’m Sandi Branker, a REALTOR® with Zolo Realty serving Ottawa and surrounding communities. When you are ready to compare homes and plan your budget, browse current Ottawa listings on Zolo.ca.

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