Ontario Land Transfer Tax (LTT)
Ontario charges a Land Transfer Tax on every home purchase. The tax is calculated on the purchase price using a tiered bracket system — the more expensive the home, the higher the effective rate.
First-Time Home Buyer Rebates
Ontario offers first-time buyers a refund on the provincial LTT — up to a maximum of $4,000. This fully offsets the LTT on homes priced up to approximately $368,000. For higher-priced homes, the rebate applies but a balance remains owing at closing.
Toronto adds its own city rebate of up to $4,475 for first-time buyers on the Municipal LTT, fully covering the Toronto LTT on homes up to approximately $400,000.
To qualify, you must be a Canadian citizen or permanent resident, be at least 18 years old, have never previously owned a home anywhere in the world, and intend to occupy the property as your principal residence within 9 months of closing. Full Ontario first-time buyer guide →
CMHC Mortgage Insurance & Ontario PST
When your down payment is less than 20%, CMHC mortgage default insurance is required. Ontario is one of the few provinces that charges its 8% provincial portion of HST on the CMHC insurance premium. This PST portion cannot be added to your mortgage — it must be paid in cash at closing.
Ontario Closing Costs Breakdown
Ontario buyers should budget 1.5–4% of the purchase price for closing costs beyond the down payment. Key items include:
- Land Transfer Tax — largest single cost; up to ~2% on most homes (double in Toronto)
- Legal / Lawyer Fees — typically $1,500–$2,500 for a standard purchase
- Title Insurance — $200–$400; standard practice in Ontario (replaces survey in most cases)
- Home Inspection — $400–$600; strongly recommended
- Ontario PST on CMHC Premium — 8% of premium (insured mortgages only)
- Prepaid Property Tax / Utility Adjustments — prorated at closing
- Moving & Miscellaneous — budget $1,000–$3,000
Ontario Mortgage Tips
Stress Test Always Applies
All federally regulated lenders (banks, credit unions under federal charter) must qualify you at the higher of 5.25% or your contract rate + 2%. This applies to both insured and uninsured mortgages. Ontario has no exemption — even provincial credit unions like Meridian apply the stress test for most products. How the stress test affects your borrowing power →
Collateral vs. Standard Charge Mortgages
TD Bank and some others register mortgages as collateral charges in Ontario, which means you cannot simply transfer to a new lender at renewal without a full discharge and re-registration (added cost). If you plan to switch lenders at renewal for a better rate, ask your broker to place you with a lender that uses a standard charge.
Title Insurance is Standard Practice
Unlike some provinces, Ontario lawyers routinely purchase title insurance (typically through FCT or Stewart Title) instead of requiring a new survey. This protects against title fraud — a documented risk in Ontario's high-value urban markets — and is generally required by lenders.
Pre-Construction HST Rebate
Buying a newly built home in Ontario triggers HST (13%). A federal rebate returns the federal portion on homes up to $450,000 in value; an Ontario rebate applies on homes up to $400,000. Builder pricing often includes the rebate assuming you qualify — confirm this in writing before signing the APS. Also understand what Tarion covers if your builder fails before committing a deposit.
Key Programs for Ontario Buyers
First Home Savings Account (FHSA)
Contribute up to $8,000/year (lifetime max $40,000) to a registered account. Contributions are tax-deductible like an RRSP; withdrawals for a qualifying home purchase are tax-free like a TFSA. Couples can combine $80,000 FHSA + $70,000 HBP for a powerful down payment strategy. Full FHSA guide →
RRSP Home Buyers' Plan (HBP)
Withdraw up to $35,000 per person ($70,000 per couple) from your RRSP tax-free for a first home purchase. The withdrawal must be repaid over 15 years starting 2 years after the year of withdrawal. Funds must be in your RRSP for at least 90 days before withdrawal. How the HBP works in 2026 →
Ontario First-Time Home Buyer LTT Rebate
The provincial rebate of up to $4,000 is applied directly at closing by your lawyer — you do not need to file separately. Ensure your lawyer confirms you qualify. If purchasing with a co-buyer who is not a first-time buyer, the rebate is prorated based on ownership share.
Frequently Asked Questions — Ontario
How much is the Ontario LTT on an $800,000 home? +
On $800,000: 0.5% × $55,000 = $275 + 1.0% × $195,000 = $1,950 + 1.5% × $150,000 = $2,250 + 2.0% × $400,000 = $8,000. Total provincial LTT = $12,475. Toronto buyers add an equal municipal LTT of ~$12,475, less the city rebate of $4,475 for first-time buyers.
Can I combine the FHSA and RRSP HBP? +
Yes. You can use both the FHSA (up to $40,000 tax-free) and the RRSP HBP (up to $35,000 per person) on the same home purchase. For a couple, this means up to $150,000 combined from these two programs alone, providing a substantial down payment source.
Does the Ontario first-time buyer rebate apply to new construction? +
Yes, the LTT rebate applies to both resale and new construction homes in Ontario. However, newly built homes are subject to HST rather than LTT on the portion of the price attributable to the building, so the LTT is calculated only on the land value in some cases. Consult your lawyer for the specific breakdown.
What is the Ontario PST on CMHC insurance and when is it paid? +
Ontario charges 8% provincial sales tax on the CMHC mortgage default insurance premium. Unlike the CMHC premium itself, which can be added to your mortgage balance, the Ontario PST must be paid in full at closing in cash. Budget for this separately — it can range from a few hundred dollars to over $2,000 depending on your mortgage size.
What is a collateral charge mortgage and should I avoid it? +
A collateral charge mortgage is registered for an amount higher than your actual mortgage (often 125% of purchase price). While it makes accessing additional equity easier later, it cannot be transferred to a new lender at renewal without a full discharge — costing $1,000–$3,000 in legal fees. If rate shopping at renewal is important to you, ask your broker to place you with a lender offering a standard charge mortgage.
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