Can I add land transfer tax to my mortgage?

Generally no. Land transfer tax is due in cash at closing and is not rolled into the mortgage amount. You need to budget for it separately, alongside other closing costs like legal fees.

Do first-time buyers pay land transfer tax?

Often they pay a reduced amount. Many provinces and some cities offer first-time home buyer rebates that lower or eliminate the tax up to a set maximum. Eligibility rules vary, so check your province and municipality.

How much should I budget for land transfer tax?

It depends on your purchase price and location, and rates differ by province and city. Because some areas also have a municipal tax, confirm the combined rate for your specific address rather than assuming a single national figure.

Mortgage Glossary

What is Land Transfer Tax?

Land transfer tax is a tax charged by most provinces when real estate changes ownership, calculated as a percentage of the purchase price. The buyer normally pays it at closing as part of their closing costs. Some municipalities, such as Toronto, levy an additional land transfer tax on top of the provincial one.

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Quick answer

Also known as: LTT, property transfer tax, deed transfer tax

Key points

Paid by the buyer in cash at closing, not financed into the mortgage.
Usually calculated on a tiered scale based on purchase price.
Rates and rules differ by province; a few charge little or none.
Some cities add a municipal land transfer tax on top.
First-time buyer rebates can reduce or eliminate the tax up to a limit.

Land Transfer Tax explained

Land transfer tax (sometimes called property transfer tax or deed transfer tax, depending on the province) is a one-time charge applied when title to a property is transferred to a new owner. It is usually calculated on a tiered or marginal basis, with the rate rising as the purchase price climbs. The buyer pays it at closing, and it is not financed into the mortgage.

The rules and rates vary widely across the country, and a few provinces charge little or none. Certain municipalities add their own land transfer tax, effectively doubling the cost in those areas. Many provinces and cities also offer rebates for first-time home buyers, which can reduce or eliminate the tax up to a set limit.

What a Land Transfer Tax is for

Land transfer tax is a revenue source for provincial and municipal governments, helping fund public services. From the buyer's perspective, it exists as an unavoidable cost of registering a change of ownership on title. Because it is due in cash at closing, it is one of the larger closing costs buyers must budget for separately from their down payment.

How it can help you

Knowing about land transfer tax early helps you budget accurately and avoid a cash shortfall on closing day. Understanding available first-time buyer rebates can save thousands. While Lenderoo focuses on comparing mortgage offers from 40+ lenders for free, planning for taxes like this alongside your financing ensures your closing-day cash is fully covered.

When it comes up

A couple buying their first home in a province with a buyer rebate factors land transfer tax into their closing budget. They estimate the tax on the purchase price, apply the first-time buyer rebate they qualify for, and set aside the remaining amount in cash so they are not caught short when the deal closes.

Example: Budgeting for the tax

Imagine a province charges land transfer tax on a marginal scale that works out to roughly 1.5% of a $400,000 purchase, or about $6,000. If you buy in a city with its own municipal land transfer tax at a similar rate, the combined bill could approach $12,000.

A first-time buyer rebate might offset a portion of this, but the takeaway is to confirm the rate for your specific province and city, since the cash difference can be substantial.

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Land Transfer Tax: frequently asked questions

Common questions Canadians ask about land transfer tax.

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Related mortgage terms

Closing Costs

Fees and expenses paid when finalizing a real estate transaction

Read definition

First-Time Home Buyer

Someone purchasing their first property.

Read definition

Property Tax

An annual tax on real estate charged by your municipality.

Read definition

Down Payment

The upfront cash payment made when purchasing a home

Read definition

Title

The legal record of who owns a property and any claims or charges registered against it.

Read definition

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Mortgage Glossary

What is Land Transfer Tax?

Find my best mortgage Back to glossary

Quick answer

Also known as: LTT, property transfer tax, deed transfer tax

Key points

Paid by the buyer in cash at closing, not financed into the mortgage.
Usually calculated on a tiered scale based on purchase price.
Rates and rules differ by province; a few charge little or none.
Some cities add a municipal land transfer tax on top.
First-time buyer rebates can reduce or eliminate the tax up to a limit.

Land Transfer Tax explained

What a Land Transfer Tax is for

How it can help you

When it comes up

Example: Budgeting for the tax

A first-time buyer rebate might offset a portion of this, but the takeaway is to confirm the rate for your specific province and city, since the cash difference can be substantial.

Have a question about land transfer tax?

Lenderoo shops 40+ lenders for free and matches you with a mortgage professional who explains every term — and finds your best rate.

Get pre-approved free Talk to an expert

Questions & answers

Land Transfer Tax: frequently asked questions

Common questions Canadians ask about land transfer tax.

Keep learning

Back to full glossary

Understand your mortgage with confidence

Lenderoo shops 40+ lenders for free and pairs you with a mortgage professional who keeps the jargon simple — and gets you a great rate.

Find my best mortgage Explore the glossary