Toronto “Luxury House Tax” (Luxury Land Transfer Tax)

As of April 1st, 2026, the City of Toronto is introducing a new land transfer tax that is being referred to as the “Luxury Land Transfer Tax”. This NEW tax is payable at the same time you pay other provincial and municipal land transfer tax, on closing for the purchase of a property.

Unlike other land transfer taxes that are charged, this only applies to home that have a purchase price in excess of $3,000,000.00. The rationale by the City of Toronto is obvious, if you can afford a three million dollar home, you can afford to pay a little extra land transfer tax.

 What is the Luxury Land Transfer Tax?

• An extra municipal land transfer tax on expensive homes located within the City of Toronto.

• Applies mainly to residential single-family homes (detached, semi, some townhouses).

• Only applies on the purchase price in excess of $3 million.

• Buyer pays it at closing at the same time as they pay provincial and original municipal land transfer tax amounts.  

Luxury Land Transfer Tax rates (effective April 2026)

These apply only to the portion above each threshold, working as a graduated rate, similar to income tax brackets.

• $3M–$4M → 4.40%

• $4M–$5M → 5.45%

• $5M–$10M → 6.5%

• $10M–$20M → 7.55%

• Over $20M → 8.6%  

Important to Note:

✔ It’s not an annual tax — it is a one-time tax only payable at the time of purchase.

✔ Only applies to the portion of the purchase price above $3M.

✔ You still pay normal property taxes to the City of Toronto yearly; this is a separate tax payable only on the transfer of the property.

✔ Applies even if it’s your principal residence.

✔ First-time buyer rebates still would apply if this is your first purchase, but may not be of much assistance at these prices.

More information can be found at the City of Toronto website here.