Toronto raised its Municipal Land Transfer Tax on expensive homes, and the higher rates have applied since April 1, 2026. City Council voted for the change on December 17, 2025. Buyers of homes priced above $3,000,000 now pay between 0.9 and 1.1 percentage points more on the slices of the price above that level.
Most home purchases in the city are not touched by this. A house at $1,200,000 or a condo at $650,000 is taxed exactly as before. This article explains what Council decided, what the new rates cost at several prices, what stays the same, and what the official record does and doesn’t say about who benefits.
What Council decided
The amendment introduced graduated Municipal Land Transfer Tax rates for high-value residential properties. It covers homes that hold one or two single-family residences. The City’s own page states that Council passed it on December 17, 2025, and that the new rates take effect on April 1, 2026.
The item started with Mayor Olivia Chow’s motion. According to the summary on the Council item page, the motion described the existing luxury rates as affecting about 2% of home buyers in 2024 and bringing in $138 million. It proposed raising the cost of luxury homes by between 0.9 and 1.1 points on the graduated rates, and it described the goal as shifting more of the cost of funding the city to those best able to pay.
Council also asked the Mayor to consider putting all of the extra revenue toward transit and housing that benefits Toronto residents. That is a request, not a legal commitment, and the tax itself goes into the city’s general revenue. We didn’t find a published estimate of what the higher bands alone will raise, so that number isn’t quoted here.
The old and new rates
Nothing below $3,000,000 moved. The bands there are 0.5% on the first $55,000, 1% up to $250,000, 1.5% up to $400,000, 2% up to $2,000,000 and 2.5% up to $3,000,000. Above that, the bands change.
| Slice of the price | Before April 1, 2026 | From April 1, 2026 |
|---|---|---|
| $3,000,000 to $4,000,000 | 3.5% | 4.40% |
| $4,000,000 to $5,000,000 | 4.5% | 5.45% |
| $5,000,000 to $10,000,000 | 5.5% | 6.50% |
| $10,000,000 to $20,000,000 | 6.5% | 7.55% |
| Above $20,000,000 | 7.5% | 8.60% |
The earlier rates had applied since January 1, 2024. So the city has changed its top bands twice in about two years, first by adding them and then by raising them. A table that shows any other numbers is likely to come from a different period.
Homes that are not one or two single-family residences follow a separate table that stops at 2% for the part of the price above $400,000. If you are unsure which category your purchase belongs to, the lawyer handling the closing can say.
How the rates apply in slices
Headlines about a tax rate of 8.60% can mislead. A rate applies only to the portion of the price inside its band, and everything below is taxed at the lower rates. A buyer of a $4,100,000 home pays 4.40% on the slice between $3,000,000 and $4,000,000, and 5.45% only on the last $100,000.
Because of this, the change brings no cliff at $3,000,000. A home priced at $3,000,001 pays the old amount plus about four cents. The amount rises smoothly from there.
The tax is worked out for the full price. Up to $3,000,000 the total is $61,475. That is $4,475 on the first $400,000, then $32,000 for the 2% slice and $25,000 for the 2.5% slice. Every dollar after that is taxed at the new rates.
What it costs at six prices
The table below compares the old and new city tax. It uses the same slice method as the City’s own tables.
| Price | Before | Now | Extra tax |
|---|---|---|---|
| $3,250,000 | $70,225 | $72,475 | $2,250 |
| $4,000,000 | $96,475 | $105,475 | $9,000 |
| $6,000,000 | $196,475 | $224,975 | $28,500 |
| $12,000,000 | $546,475 | $635,975 | $89,500 |
| $30,000,000 | $1,816,475 | $2,099,975 | $283,500 |
Take the $6,000,000 row as an example. To $5,000,000 the new tax is $159,975. The last $1,000,000 falls in the 6.50% slice and adds $65,000, so the total is $224,975. Under the earlier 5.5% it would have added $55,000 to a base of $141,475, which gives $196,475. The difference is $28,500.
At the low end of the affected range the extra cost is modest. Someone paying $3,250,000 sees $2,250 added, a little under 0.07% of the price. At the top end the extra cost reaches six figures, which is where the policy has an effect on a buyer’s decision.
The provincial tax on top
Buyers in Toronto also pay Ontario’s land transfer tax, and that one didn’t change. Above $2,000,000 the province charges 2.5% on homes with one or two single-family residences, with no further bands. The provincial tax on $6,000,000 is $36,475 plus $100,000, which is $136,475.
Together, on a $6,000,000 home, the two taxes are $361,450. Before April 1 they were $332,950. For a home at $3,250,000 the provincial tax is $65,975, so the combined bill is $138,450.
So the city’s share of the total grows with the price. At $3,250,000 it is a little over half. At $6,000,000 it is about 62%, and at $12,000,000 it is about 65% of the two taxes combined. The Toronto MLTT calculator and the land transfer tax calculator run the two numbers side by side.
What did not change
Several things stayed the same, and they answer most questions from ordinary buyers. Rates below $3,000,000 are as they were. Ontario’s own tax is unchanged. Toronto’s first-time buyer rebate of up to $4,475 and the provincial refund of up to $4,000 also carry on as before.
Who pays and when hasn’t moved either. Buyers pay, and the tax is settled at closing through the lawyer. A buyer in the city pays both taxes, while one outside the city boundary pays only Ontario’s.
The higher bands don’t apply to a first-time buyer in any special way. A first-time buyer of a $4,000,000 home gets the same $4,475 rebate as one who buys at $500,000, and nothing more.
What we don’t know about the effects
People have asked whether the higher rates will cool the top of the market, push buyers to suburbs outside the city, or change what sellers ask. Those are reasonable questions. We couldn’t find an official study that answers them, and the tax has been in place for only part of a year at the time of writing, so anyone claiming a definite effect should show their data.
What can be said with certainty is the size of the cost for the buyer. Above $3,000,000 each extra dollar of price now carries a combined tax of 6.9 cents at first. That rises to 7.95 cents above $4,000,000, 9 cents above $5,000,000, 10.05 cents above $10,000,000 and 11.1 cents above $20,000,000. A buyer can weigh those figures against the price gap between two homes.
The boundary matters at these prices. A home in Markham, Vaughan or Mississauga carries no city tax, so a $5,000,000 purchase there avoids $159,975. That is a large sum, but a buyer also gives up the location. It is one factor among many, and it is for each buyer to weigh.
Practical points for a buyer above $3 million
Ask the lawyer for both tax figures in writing as soon as an offer is accepted. Confirm the date rule if a deal was signed near a change in rates. Put the taxes into the cash budget, since they are paid on closing day and are not part of the mortgage in the usual case.
- Get the city and provincial tax figures in writing, with the table used.
- Check the property category, because only one or two single-family residences follow the luxury bands.
- Plan for the cash: a $4,000,000 home with 20% down needs $800,000 plus $191,950 in taxes, or $991,950.
- Keep a printout of the city’s rates page from the day you made the offer.
For a non-resident buyer the 25% Non-Resident Speculation Tax applies on top, on the price. On $4,000,000 that is $1,000,000. The Ontario NRST calculator shows it. There is a rebate if the buyer becomes a permanent resident within four years and lives in the home.
Where the money is meant to go
The Council record shows a request, not a rule. Council asked the Mayor to consider using all of the additional revenue for transit and housing. Money collected from the tax goes to the city’s general budget, and the budget process decides what is spent where.
The 2026 budget, adopted on February 10, 2026, has an operating budget of $18.9 billion and a capital plan of $63.1 billion for 2026 to 2035. Against those numbers, the extra revenue from a few high-priced sales each year is small, and it is not the main way the city pays for anything. It is one source among several, and how much it raises depends on how many homes above $3,000,000 sell.
The same budget raised residential property tax by about 2.2%, which is roughly $91.53 a year on an average assessed home of $692,140. Residents who are not buying a home still see the city’s finances through that bill. The property tax calculator shows the amount for a given assessed value. For your own numbers, try the Closing Costs calculator, or browse the Ontario housing calculators.
Sources
- City of Toronto, Municipal Land Transfer Tax
- City of Toronto, MLTT rates and fees
- City of Toronto, MLTT historical rates
- City of Toronto Council, item 2025.EX28.1
- Ontario, Calculating land transfer tax
Common questions
When did Toronto raise the luxury land transfer tax?
Does the new tax affect a $2 million home?
How much more does a $6 million home cost now?
Is the extra revenue reserved for housing and transit?
Last reviewed: . Figures come from the official sources listed above. How we check the numbers and our editorial policy.