Written by: Dina Nikseresht
In Ontario, there are various taxes that apply when purchasing property. In this article we will review the key taxes and eligible rebates. At the bottom, you can find a useful chart summarizing the information discussed.
Harmonized Sales Tax
Harmonized Sales Tax (HST) is applicable to certain types of property purchases in Ontario. Resale residential homes are exempt from HST. However, newly built homes and condos are subject to 13% HST.
In a typical purchase from a developer, the HST is included in the purchase price, assuming the buyer is eligible for the HST new housing rebate. If the buyer is not eligible, the purchase price may be adjusted to account for the full HST payable.
The good news is, if the property will be you primary residence, you may qualify for rebates:
- Federal New Housing Rebate: available if the purchase price is $450,000 or less. Offers a maximum rebate of $6,300
- Ontario New Housing Rebate: offers a maximum rebate of $24,000 with no purchase price limit
If you intend to rent a newly built home, you may be eligible for the New Residential Rental Property Rebate (NRRP) instead. In order to apply for this rebate, you must have a signed lease for at least 1 year with a tenant who will be the first occupier of the property, and you must pay the full HST amount at closing. You can apply for the rebate from the CRA after the lease is in place. The rebate application must be filled within 2 years of final closing.
Commercial properties also have 13% HST applicable. When purchasing a commercial property you will either have to pay HST to the seller directly on closing, or if you are an HST registrant, you can self-assess the HST payable directly to CRA and claim an Input Tax credit (ITC). This allows you to recover the HST paid, provided the property is used in commercial activities.
Land Transfer Tax
When purchasing property in Ontario you are subject to land transfer tax (LTT). LTT is calculated based on the value of the property as follows:
- 5% on first $55,000.00
- 0% on $55,000.01 to 250,000.00
- 5% on $250,000.01 to $400,000.00
- 0% on 400,000.01 to 2,000,000.00
- 5% on 2,000,000.01 and above
First-time buyers may be eligible for a rebate of up to $4,000.
For properties purchased in Toronto, an additional Municipal Land Transfer Tax (MLTT) applies at the same rates, and first-time buyers can also receive a rebate of up to $4,475.
Non-Resident Speculation Tax
As of October 2022, Non-Resident Speculation Tax (NRST) applies to the purchase of property in Ontario by foreign nationals, foreign corporations and taxable trustees. The NRST is 25% of the purchase price. Similar to land transfer tax, properties purchased in Toronto have an additional Municipal Non-Resident Speculation Tax (MNRST) applicable. Starting January 2025, properties purchased in Toronto by foreign nationals, have a 10% MNRST applicable.
While there is no rebate for the MNRST, foreign buyer who become a permanent resident within 4 years of the purchase date can apply for a rebate of the provincial NRST.
| Tax | Applies To | Rebate Eligibility |
| HST on Resale Homes | Not applicable (HST does not apply) | N/A |
| HST on New Homes & Condos | Newly built homes and condos, 13% HST applies | Yes, if primary residence, federal and provincial rebates available |
| HST on Commercial or Mixed-Use Properties | 13% HST applies | No direct rebate, businesses may claim Input Tax Credits (ITC) |
| HST on Vacant Land | Depends on zoning and seller, HST may apply | N/A |
| Ontario Land Transfer Tax (LTT) | All property purchases in Ontario | Yes, first-time buyers. Up to $4,000 |
| Municipal Land Transfer Tax (MLTT) | Additional tax for properties in Toronto | Yes, first-time buyer. Up to $4,475 |
| Non-Resident Speculation Tax (NRST) | 25% tax on foreign buyers | Yes, rebate if buyer becomes PR within 4 years |
| Municipal Non-Resident Speculation Tax (MNRST) | 10% tax in Toronto on foreign buyers | No |
| Rebate | Eligibility | Amount |
| Federal New Housing Rebate | Primary residence, less than $450,000 | Up to $6,300 |
| Ontario New Housing Rebate | Primary residence | Up to $24,000 |
| New Residential Rental Property Rebate (NRRP) | 1-year lease signed for rental use | Full refund |
| First-Time Home Buyer LTT Rebate (Ontario) | First-time buyer | Up to $4,000 |
| First-time Home Buyer MLTT Rebate (Toronto) | First-time buyer in Toronto | Up to $4,475 |
| Non-Resident Speculation Tax Rebate | Foreign buyers becoming PR within 4 years | Full refund |
