Buying in Forest Hill North and trying to pin down your true cash at closing? For luxury purchases, the land transfer taxes are often the single largest cost after your down payment. You want clarity, fast, so you can negotiate with confidence and plan your funds. Below, you’ll find a simple framework, exact examples from $2M to $10M, and planning tips tailored to Toronto. Let’s dive in.
What you pay in Forest Hill North
If you buy in Forest Hill North, you pay two separate land transfer taxes at closing. These are cumulative and both are based on your purchase price.
- Ontario Land Transfer Tax (provincial LTT)
- City of Toronto Municipal Land Transfer Tax (MLTT)
Your lawyer collects and remits both taxes on closing before the transfer is registered.
How the tax works
Both the provincial LTT and the Toronto MLTT use marginal brackets. That means each bracket rate applies only to the portion of the price inside that bracket, not the entire price.
Ontario LTT brackets
- 0.50% on the first $55,000
- 1.00% on the portion from $55,000.01 to $250,000
- 1.50% on the portion from $250,000.01 to $400,000
- 2.00% on the portion from $400,000.01 to $2,000,000
- 2.50% on the portion greater than $2,000,000
Toronto MLTT in practice
Toronto’s MLTT follows the same bracket structure up to $2,000,000, so the municipal calculation mirrors the provincial amount across those tiers. Above $2,000,000, the municipal top rate is lower than the provincial top rate, but you pay both. The combined marginal rate on dollars above $2,000,000 is materially higher than the provincial rate alone, which is why effective tax percentages rise with larger prices.
Simple three-step method
- Calculate Ontario LTT using the brackets above.
- Calculate Toronto MLTT using the same brackets up to $2,000,000, then apply the municipal top rate on the amount above $2,000,000.
- Add provincial LTT + municipal MLTT for your total due at closing.
Luxury price examples
Below are worked examples using the marginal method. All figures are rounded to the nearest dollar.
$2,000,000 purchase
- Ontario LTT: $36,475
- Toronto MLTT: $36,475
- Combined LTT: $72,950
- Effective rate: about 3.65% of price
$2,500,000 purchase
- Ontario LTT: $48,975
- Toronto MLTT: $46,475
- Combined LTT: $95,450
- Effective rate: about 3.82%
$3,000,000 purchase
- Ontario LTT: $61,475
- Toronto MLTT: $56,475
- Combined LTT: $117,950
- Effective rate: about 3.93%
$5,000,000 purchase
- Ontario LTT: $111,475
- Toronto MLTT: $96,475
- Combined LTT: $207,950
- Effective rate: about 4.16%
$10,000,000 purchase
- Ontario LTT: $236,475
- Toronto MLTT: $196,475
- Combined LTT: $432,950
- Effective rate: about 4.33%
Key takeaway: amounts above $2,000,000 are taxed at a higher combined marginal rate, so the effective tax percentage increases as the price rises.
Toronto vs outside Toronto
If you buy just outside the City of Toronto, you do not pay the municipal MLTT. For a $5,000,000 purchase in a nearby municipality with no MLTT, you would pay only the Ontario LTT of $111,475. That same $5,000,000 purchase inside Toronto totals about $207,950, a difference of roughly $96,475. This is a useful benchmark when you compare similar homes inside versus outside Toronto boundaries.
Plan your cash at closing
You want no surprises on closing day. Use this checklist to prepare.
Who pays and when
The buyer pays both the provincial LTT and the Toronto MLTT. Your lawyer (or notary) calculates and remits both at closing.Can you finance the LTT
Plan to have the full amount available in cash or readily available funds. Some lenders may allow limited costs in proceeds, but do not rely on it.First-time buyer rebates
Provincial and municipal rebates exist for first-time buyers, though luxury purchases rarely qualify. If you think you may qualify, speak with your lawyer about current eligibility rules and documentation.Non-resident considerations
Separate taxes or surtaxes can apply to non-resident or non-Canadian buyers. Confirm current rules and rates with your legal and tax advisors.Other closing costs
Budget for legal fees and disbursements, title insurance, searches or surveys, adjustments, and HST where applicable on certain transactions. In luxury deals, legal and due diligence costs can be higher than typical ranges.Timing and documentation
LTT forms are prepared and paid on closing. If you plan to claim a rebate, ensure your documents are ready, and allow time for processing.Negotiation context
If you discuss price adjustments to offset tax burden, quantify the exact LTT using the marginal method so both sides understand the impact.
Next steps for Forest Hill North buyers
If you are considering a home in Forest Hill North, build your cash-on-close plan early. We can walk you through the bracket math for your target price, coordinate with your legal team, and help you compare similar homes in and out of Toronto boundaries so the numbers are clear.
Ready to move forward with a private, data-driven consultation on a specific property or price band? Connect with Barry Cohen Homes to schedule a confidential conversation tailored to your goals.
FAQs
What land transfer taxes apply when buying in Toronto?
- In Toronto, you pay two taxes at closing: the Ontario Land Transfer Tax and the City of Toronto Municipal Land Transfer Tax, calculated on a marginal bracket basis.
How do I estimate land transfer tax on a $3,000,000 home?
- Apply Ontario brackets to the price, then apply Toronto’s brackets and add both results; at $3,000,000 the combined total is about $117,950 using the marginal method.
Does my deposit change the land transfer tax owed?
- No, land transfer tax is based on the purchase price, not the size of your deposit.
Are first-time buyer rebates available on luxury purchases?
- Rebates exist provincially and municipally, but luxury buyers rarely qualify; confirm eligibility rules and any price caps with your lawyer.
Can non-resident or international buyers face extra taxes?
- Yes, separate non-resident or foreign buyer taxes may apply depending on status and current rules; confirm details with legal and tax advisors.
Can I avoid Toronto’s MLTT by buying in a company or trust?
- Anti-avoidance provisions exist and structures can trigger complex tax issues; seek legal and tax advice before considering any strategy to reduce LTT.
Can the land transfer tax be included in my mortgage?
- Lenders typically require LTT to be paid in cash on closing; some may permit limited costs in proceeds, but you should plan to have funds available.
