Why Toronto’s Municipal Land Transfer Tax Is Making Home Ownership Feel Out of Reach

If you have ever dreamed of owning a home in Toronto, you already know the journey can feel overwhelming. Prices are high, competition is fierce, and the process itself takes emotional and financial stamina. But there is another obstacle that often surprises buyers: the municipal land transfer tax. And the more time I spend with clients, the more I see just how deeply this tax impacts their hopes of putting down roots in our City.

Let us start with the reality. With the average home price in Toronto now above one million dollars, the municipal land transfer tax alone adds more than seventeen thousand dollars to a buyer’s upfront closing costs. Pair that with the provincial land transfer tax—yes, buyers must pay both—and the total grows to roughly thirty-four thousand dollars on an average home. When you consider that Toronto already ranks among the highest taxed housing jurisdictions in North America, it becomes clear why so many buyers feel discouraged before they even begin.

According to the Canadian Centre for Economic Analysis, more than thirty-five percent of the cost of a new home in Ontario is now made up of government taxes. That is a staggering number, and it reinforces what many Toronto buyers and owners already feel: they are paying more than their fair share, without seeing meaningful improvements in affordability.

Since the municipal land transfer tax was introduced in 2008, it has been increased twice—once in 2017 and again in 2023. Each time, the promise was the same: that these increases would help make rental housing and other forms of housing more affordable. Yet we have never seen any data or evidence showing that raising taxes on home buyers actually makes our City more affordable. If anything, the stories I hear from hopeful buyers and the real market data suggest the opposite.

The municipal land transfer tax creates ripple effects throughout the market. It discourages homeowners from listing because selling becomes more expensive. For higher-value homes—particularly those over three million dollars—the increased tax limits the supply of move-up properties. When that supply tightens, higher-income buyers begin competing for more affordable homes, putting even more pressure on first-time buyers and younger families who are already stretched thin.

And here is something that does not get talked about enough: Toronto has not updated its rebate for first-time home buyers since 2016. That means someone purchasing an average-priced home today must come up with more than twenty-five thousand dollars in land transfer taxes alone. For many, that is the breaking point—just one cost too many in an already expensive City.

If Toronto is serious about making life more affordable, it cannot begin by raising taxes yet again. Instead, City Council should be giving first-time buyers a fighting chance. They could start by increasing the municipal land transfer tax rebate, which would directly support the people who need it most: the young families, new Canadians, and long-time residents who simply want the opportunity to stay in the City they love.

This is why the Toronto Regional Real Estate Board has urged Council not to move forward with another increase. Instead, it recommends redirecting the additional revenue the City has already earned from past tax changes to enhance the first-time buyer rebate.

At the heart of this issue is something simple: hope. Hope that home ownership in Toronto is still possible. Hope that the City recognizes how important this dream is for so many people. And hope that thoughtful, balanced decisions can create a housing market that works for everyone.

Toronto deserves nothing less.