When budgeting for your first home in Ontario, the Land Transfer Tax (LTT) is often the largest “hidden” cost. On a $700,000 home, the provincial tax alone is nearly $10,500.
The good news? To help first-time buyers enter the market, the Ontario government offers a rebate of up to $4,000. If you are buying in Toronto, you could be eligible for even more. Here is the 2026 guide to how the rebate works and how to claim it.
1. How Much is the Rebate?
The Ontario Land Transfer Tax rebate covers the full amount of the tax up to a maximum of $4,000.
- Homes under $368,000: You will pay $0 in provincial land transfer tax because the rebate covers the entire amount.
- Homes over $368,000: You will receive the full $4,000 discount, but you must pay the remaining balance of the tax.
The “Toronto Double”
If you are buying within the City of Toronto, you also pay a Municipal Land Transfer Tax (MLTT). Fortunately, Toronto offers its own first-time buyer rebate of up to $4,475.
- Total Potential Savings in Toronto: $8,475 ($4,000 provincial + $4,475 municipal).
2. Are You Eligible?
To qualify for the $4,000 Ontario rebate, you must meet these criteria:
- Age: You must be at least 18 years old.
- Residency: You must be a Canadian Citizen or Permanent Resident.
- First-Timer Status: You cannot have owned a home (or even a partial interest in a home) anywhere in the world at any time.
- Principal Residence: You must move into the home within 9 months of the purchase.
- Spousal Rule: If you have a spouse, they also cannot have owned a home while they were your spouse. (If they owned a home before you were together but sold it before you became spouses, you may still qualify).
3. Buying with a Partner or Parent
What happens if you are a first-time buyer, but your co-signer (like a parent) is not?
- The rebate is pro-rated based on the percentage of the home owned by the eligible person.
- If you own 50% and your parent (who has owned a home before) owns 50%, you can only claim 50% of the rebate (e.g., $2,000 instead of $4,000).
4. How to Claim the Rebate
There are two ways to get your money:
- Instantly at Closing (Most Common): Your real estate lawyer will handle the paperwork. They will have you sign an affidavit confirming you are a first-time buyer. The rebate is then applied directly to the tax owing on the day of closing, so you don’t have to “pay and wait” for a refund.
- After Closing: If you didn’t claim the rebate at the time of purchase (for example, if you were waiting for your Permanent Residency to be approved), you have up to 18 months after the closing date to apply for a refund through the Ministry of Finance.
Find Out More
Find out more about Guthrie Law’s real estate legal services here.
The information provided on this blog is for general informational purposes only and does not constitute legal advice or a legal opinion. No solicitor-client relationship is created by your use of this site or by any communication sent to Guthrie Law through this website. While we endeavour to keep the information up to date and correct, laws in Ontario change frequently. You should not act or rely on any information on this website without seeking the advice of a qualified lawyer regarding your specific situation.
