What land transfer tax costs on closing day, in every province and territory, including the municipal charges in Toronto and Montreal and the four places that give first-time buyers something back.
Land transfer tax is the closing cost people forget to save for. It is not part of the mortgage, it cannot be financed, and it has to be paid in cash on the day the deal closes, alongside the legal fees and the adjustments.
How much it is depends entirely on where you are buying. The same home costs a Toronto buyer several times what it costs an Alberta buyer, because Alberta has no land transfer tax at all and charges a registration fee instead, while Toronto charges a municipal tax on top of the provincial one. Four places give first-time buyers something back: Ontario, Toronto, British Columbia and Prince Edward Island. Everywhere else, being a first-time buyer changes nothing.
Common questions
- Can land transfer tax be added to the mortgage?
- No. It is due in cash on closing, and lenders do not finance it. It sits alongside the down payment, the legal fees and the title insurance as money you need to have on the day, which is why it belongs in the savings plan rather than in the mortgage.
- Which province has the highest land transfer tax?
- On a typical home, Toronto is the most expensive place in Canada to close, because a Toronto buyer pays the Ontario land transfer tax and the Toronto municipal land transfer tax on the same purchase. Outside Toronto, British Columbia and Manitoba are usually next. Alberta, Saskatchewan and the territories charge registration fees rather than a tax, and those run to hundreds of dollars rather than thousands.
- Do first-time buyers pay land transfer tax?
- Sometimes less, rarely nothing. Ontario refunds up to $4,000 and Toronto up to $4,475, which together cover a modest purchase and only dent an expensive one. British Columbia exempts a first-time buyer entirely up to $835,000 and phases the relief out by $860,000. Prince Edward Island exempts a qualifying first-time buyer with no price ceiling. No other province or territory has a first-time buyer land transfer tax break.
- What is the welcome tax in Quebec?
- It is the same thing under a different name: the transfer duty, charged by the municipality rather than the province, on a scale the province sets and larger cities are allowed to exceed. Montreal charges more than the provincial scale above $552,300. The bill arrives in the post weeks or months after closing, which is why it surprises people who have already spent the moving money.