A Land Transfer Tax Myth

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There’s a common misconception about First-Time Homebuyers (FTHB) and Land Transfer Tax (LTT).

Most people know there’s a rebate available for first-time buyers purchasing their first home.

But what’s often overlooked is this: the rebate is capped at $4,000.

This means, if a home’s purchase price is $368,000 or less, a first-time buyer won’t owe any Land Transfer Tax after applying the rebate.

Now, let’s be real—finding homes in that price range in today’s market is rare. For most first-time buyers, this means they’ll still owe some LTT.

For example, if a buyer purchases a home for $600,000, the Land Transfer Tax would be $8,475. After applying the $4,000 rebate, they’re still responsible for $4,475.

Despite this, I occasionally get calls from potential clients who say, “Someone told me I don’t pay any LTT if it’s my first home.”

That’s why it’s important to set the record straight.

When clients ask about LTT, remind them that the rebate only covers up to $4,000. Setting expectations early avoids disappointment later.

Toronto Only

If your client is buying in Toronto, there’s one more thing to consider: Toronto has its own Municipal Land Transfer Tax (MLTT). That means properties in the city are taxed twice—once provincially and once municipally.

The calculation for both LTT and MLTT is the same, but the first-time homebuyer rebate for the MLTT is slightly higher at $4,475.

So let’s revisit our $600,000 example:

• For a regular buyer:
  • Provincial LTT: $8,475
  • Municipal LTT: $8,475
  • Total: $16,950
• For a first-time buyer:
  • Provincial LTT: $8,475 - $4,000 rebate = $4,475
  • Municipal LTT: $8,475 - $4,475 rebate = $4,000
  • Total: $8,475