In short
It's due on closing day and is usually the biggest closing cost.
Toronto buyers pay a second, municipal land transfer tax. Ottawa doesn't have one.
How Ontario calculates it
Ontario land transfer tax is charged in brackets on the price you pay, similar to income tax. The rate is 0.5% on the first $55,000, 1% from $55,000 to $250,000, 1.5% from $250,000 to $400,000, and 2% above $400,000.
A fifth bracket of 2.5% applies to the amount over $2 million when the property has one or two single-family homes on it.
Your real estate lawyer calculates the tax, collects it from you and pays it when the transfer is registered on closing day.
Because the brackets climb with price, the effective rate rises too. On a $400,000 home the tax is $4,475, while on a $650,000 home it's $9,475. The tax applies to resale and new homes alike, and it's charged on the full price, not just the mortgage.
The first-time buyer refund
Qualifying first-time buyers can get a refund of up to $4,000. In effect, there's no tax on the first $368,000 of the price, and anyone buying above that gets the full $4,000 off.
To qualify, you must be at least 18, a Canadian citizen or permanent resident, and move in within nine months of closing. You can't have ever owned a home anywhere in the world, and your spouse can't have owned one while you were together.
Most buyers claim it through their lawyer at registration. If it isn't claimed then, you can apply to the Ministry of Finance within 18 months.
Ottawa vs Toronto
Toronto is the only Ontario city with its own municipal land transfer tax, so buyers there pay twice. Ottawa has no municipal land transfer tax. Buyers in Ottawa pay only the provincial tax.
The province's rates are the same across Ontario, so a home at the same price in Ottawa, Kanata or Barrhaven carries the same land transfer tax. If you're comparing a move from Toronto, the savings on the municipal tax can be significant.
Common questions about land transfer tax
How much is land transfer tax in Ottawa?
Ottawa buyers pay only Ontario's provincial land transfer tax, because the city has no municipal one. On a $650,000 home that's $9,475, or $5,475 for a qualifying first-time buyer after the $4,000 refund. The tax is calculated in brackets from 0.5% to 2.5% of the price.
Do first-time buyers pay land transfer tax in Ontario?
Yes, but qualifying first-time buyers can get up to $4,000 refunded. That covers the full tax on homes up to $368,000. You must be 18 or older, a citizen or permanent resident, never have owned a home anywhere, and move in within nine months.
When is land transfer tax paid in Ontario?
It's paid on closing day, when the transfer is registered. Your lawyer collects the money from you beforehand and pays it to the province as part of registration. Plan for it in cash, since it can't be added to your mortgage.
Does Ottawa have a municipal land transfer tax?
No, Ottawa does not have a municipal land transfer tax. In Ontario, only Toronto charges one on top of the provincial tax. That keeps closing costs lower for Ottawa buyers at the same price point. Buyers anywhere in Ottawa pay the same provincial rates.
Sources
General information for Ontario, updated October 2026. Not legal, tax or mortgage advice. Rules change, so confirm with your lawyer, lender or the source above before you rely on it.