What Is the Land Transfer Tax in Ontario and How Much Will I Pay?
Ontario's land transfer tax is a closing cost every buyer in London pays — it's calculated on a sliding scale based on your purchase price, due on closing day, and separate from your down payment. First-time buyers get a rebate worth up to $4,000, which covers the full tax on homes priced up to $368,000. Here's exactly how it's calculated and what you should budget for.
Eric Cassidy
London Ontario Real Estate Agent, Cassidy & Co.
What Is the Land Transfer Tax in Ontario?
Land transfer tax (LTT) is a provincial tax paid by the buyer — not the seller — whenever a property changes ownership in Ontario. It's calculated as a percentage of the purchase price on a marginal, bracketed scale (similar to income tax brackets), and it's paid in full on closing day as part of your closing costs. London is not subject to any additional municipal land transfer tax — that only applies inside the City of Toronto — so buyers here pay the provincial rate only.
How Is Ontario's Land Transfer Tax Calculated?
Ontario's LTT is marginal: each portion of your purchase price is taxed at its own bracket rate, and only the amount above each threshold is taxed at the next rate up.
London's average resale price sat around $603,000 as of July 2026. On a $600,000 purchase, the math works out to $275 (first bracket) + $1,950 (second bracket) + $2,250 (third bracket) + $4,000 (fourth bracket) = $8,475 in land transfer tax, due on closing.
The First-Time Home Buyer Rebate
Ontario offers first-time buyers a land transfer tax rebate worth up to $4,000, applied directly at closing so you don't have to pay the full amount up front and wait for a refund. This rebate covers the entire LTT bill on homes purchased for $368,000 or less. Above that price, you receive the full $4,000 rebate and pay the remaining balance yourself.
What this means for buyers: To qualify for the rebate, you must be at least 18, a Canadian citizen or permanent resident, have never owned a home anywhere in the world, and occupy the home as your principal residence within 9 months of closing. Your lawyer applies the rebate automatically at closing — you shouldn't need to chase it down afterward as long as you tell them you qualify.
How and When Do You Pay It?
Your real estate lawyer calculates and pays the land transfer tax on your behalf as part of closing, using funds you provide alongside your down payment and other closing costs. It's not something you write a separate cheque for on your own — it's built into the funds your lawyer requests from you a few days before closing, typically itemized clearly on your Statement of Adjustments.
Is Land Transfer Tax Tax-Deductible?
No. Land transfer tax is treated as a closing cost, not a deductible expense, and can't be claimed on your personal income tax return. Budget for it the same way you budget for your down payment — as real money due on closing day, not something you'll recover later. It's one of several closing costs beyond your down payment; for the full list, see our guide to the real cost of buying a home in London Ontario.
How Land Transfer Tax Fits Into Your Total Cash Needed at Closing
Land transfer tax is one of the most overlooked line items when buyers plan how much cash they'll need on closing day — most people budget carefully for their down payment and then get surprised by everything else layered on top. Beyond the LTT itself, plan for legal fees (roughly $1,500–$2,500 in Ontario), title insurance, a home inspection (usually $400–$600), and adjustments for prepaid property taxes or utilities the seller has already covered. For a full breakdown of what to have set aside before you make an offer, see our guide on how much money you need to buy a house in London Ontario.
A common rule of thumb is to budget an extra 1.5% to 4% of the purchase price on top of your down payment to cover land transfer tax and every other closing cost combined — closer to 1.5% if you qualify for the first-time buyer rebate, closer to 4% if you don't.
Frequently Asked Questions
What is the land transfer tax in Ontario?
Land transfer tax is a provincial tax paid by the buyer on closing day, calculated as a percentage of the purchase price on a marginal bracket scale ranging from 0.5% to 2.5%. It's separate from your down payment and mortgage.
How much will I pay in land transfer tax in London Ontario?
On a home priced at London's July 2026 average of about $603,000, land transfer tax works out to roughly $8,500 before any rebate. First-time buyers reduce that by up to $4,000.
Do first-time home buyers get a land transfer tax rebate in Ontario?
Yes. First-time buyers receive a rebate worth up to $4,000, which covers the entire land transfer tax on homes priced up to $368,000. Above that, the full $4,000 is still applied and you pay the remaining balance.
Does London Ontario have a municipal land transfer tax like Toronto?
No. Only the City of Toronto charges an additional municipal land transfer tax. Buyers in London Ontario pay only the provincial rate.
Is land transfer tax tax-deductible in Ontario?
No, land transfer tax is a closing cost, not a deductible expense, and cannot be claimed on your income tax return.
BUDGETING FOR YOUR PURCHASE?
Let's Map Out Your Full Closing Costs
Land transfer tax is just one piece. I'll walk you through everything you actually need to budget for — down payment, closing costs, and taxes — before you make an offer in London Ontario.
Eric Cassidy
London Ontario Real Estate Agent — Cassidy & Co.
Eric Cassidy is a REALTOR® and founder of Cassidy & Co. Real Estate, serving buyers and sellers across London, Ontario. He helps buyers understand every closing cost up front, including land transfer tax, so there are no surprises before closing day. Learn more about Eric and the team.
Categories
Recent Posts
