December 17, 2025 · The Couple Estates
Toronto Council Just Approved a Luxury Land Transfer Tax Hike: Up to 8.6% on $20M+ Homes Starting April 1, 2026
On December 17, 2025, Toronto City Council voted 17-7 to raise the Municipal Land Transfer Tax on homes over $3 million. Here are the new brackets, what they cost, and what luxury buyers and sellers should do before April 1.
Toronto City Council voted this afternoon — 17 in favour, 7 against — to raise the Municipal Land Transfer Tax (MLTT) on luxury residential sales. Mayor Olivia Chow's proposal clears the final hurdle, and the new brackets take effect for closings on or after April 1, 2026.
If you are selling a home over $3M in Toronto, or thinking about listing one in the next six months, this post is for you. The short version: a buyer purchasing a $5M Rosedale home on April 1, 2026 will pay roughly $41,000 more in Toronto MLTT than a buyer who closed on March 31. At the very top end of the market, the delta is hundreds of thousands.
The new Toronto luxury MLTT brackets (effective April 1, 2026)
These brackets are graduated — each rate applies only to the portion of the sale price within that band, not the whole price.
| Price band | MLTT rate | Previous rate | Change |
|---|---|---|---|
| $3,000,000 – $4,000,000 | 4.40% | 3.50% | +0.90 pts |
| $4,000,000 – $5,000,000 | 5.45% | 4.50% | +0.95 pts |
| $5,000,000 – $10,000,000 | 6.50% | 5.50% | +1.00 pts |
| $10,000,000 – $20,000,000 | 7.55% | 6.50% | +1.05 pts |
| Over $20,000,000 | 8.60% | 7.50% | +1.10 pts |
Rates below $3M are unchanged. The city's existing graduated structure from $0 to $3M remains:
- $0 – $55,000: 0.5%
- $55,000 – $250,000: 1.0%
- $250,000 – $400,000: 1.5%
- $400,000 – $2,000,000: 2.0%
- $2,000,000 – $3,000,000: 2.5%
And Toronto's MLTT stacks on top of Ontario's provincial Land Transfer Tax, which has its own brackets topping out at 2.5% over $2M.
What the new tax actually costs
Four worked examples for a buyer purchasing a home and closing on or after April 1, 2026:
$3,500,000 home (example: Leaside / Forest Hill / Rosedale entry)
- Toronto MLTT under new rules: $69,375
- Toronto MLTT under old rules: $60,625
- Extra cost to the buyer: $8,750
$5,000,000 home
- Toronto MLTT under new rules: $125,875
- Toronto MLTT under old rules: $105,625
- Extra cost: $20,250
$10,000,000 home
- Toronto MLTT under new rules: $450,875
- Toronto MLTT under old rules: $380,625
- Extra cost: $70,250
$25,000,000 home
- Toronto MLTT under new rules: $1,608,375
- Toronto MLTT under old rules: $1,330,625
- Extra cost: $277,750
And remember: Ontario's provincial LTT is owed on top of Toronto's MLTT. On a $10M home, the all-in combined LTT bill after April 1 runs close to $860,000.
Who pays this
In Ontario, Land Transfer Tax is a buyer-side cost. It is collected at closing by the buyer's real estate lawyer and remitted to the city. Technically the buyer writes the cheque — practically, buyers price it into what they are willing to offer, so a portion is economically absorbed by sellers through slightly lower prices on the next sale.
A few important details:
- First-time home buyer rebate does not help here. The Toronto MLTT first-time buyer rebate caps at $4,475 and phases out well below $3M anyway. No buyer of a $3M+ home is receiving this rebate.
- Non-resident buyers pay on top of this. If the buyer is a non-resident of Canada, the provincial 25% Non-Resident Speculation Tax and Toronto's 10% Municipal Non-Resident Speculation Tax both apply in addition.
- Applies to conveyances of one or two single-family residential properties. Multi-unit residential transactions have their own treatment.
If you are a luxury seller, here's what to do
There are two realistic windows.
Window 1 — close before April 1, 2026. If you are considering listing in early 2026 anyway, there is a real incentive to move your closing to before April 1. A buyer comparing two otherwise identical $6M offerings — one with a March 28 closing and one with an April 10 closing — will effectively pay $30,500 more in tax on the April deal. That money comes out of their budget for your asking price. Listing in mid-to-late January 2026 to target a late-March close is the clean play.
Window 2 — list after, but price into the new reality. If you miss the March window, do not panic. The luxury market has enough momentum from HNW buyers that the tax change gets absorbed into the new price equilibrium within roughly one season. By summer 2026, it will no longer be material in negotiations — it will just be the new baseline. The key is to not list between February 2026 and April 2026 at a price that assumes the old tax regime. That is the worst-timing band and buyers will weaponize the upcoming tax change against you.
If you are a luxury buyer, here's what to do
Close by March 31, 2026. If you have a deal in motion at $5M+, work with the seller's agent and both lawyers to get firm on a March 30 or 31 closing. The tax savings are material — on a $7M deal, the delta is about $50,000 in your pocket.
Do not try to renegotiate an APS that is already firm to shift the closing date under the guise of the tax change. Toronto has been clear the new rates apply to closings on or after April 1, regardless of when the APS was signed. Sellers under contract with a May or June closing have no obligation to accommodate.
If you are shopping actively and considering a purchase in 2026, budget the new tax rates into your affordability math now. On a $4M home, the all-in closing costs with the new MLTT, provincial LTT, legal, and title now run roughly $240,000–$260,000 before any non-resident taxes.
See Toronto luxury listings or talk to us if you want a tactical read on closing-date timing for a specific property.
Why the tax was raised
Mayor Chow's case, supported by 16 councillors, came down to three arguments:
- Revenue. The change is projected to bring $13.8 million in additional MLTT revenue in 2026, and lifts total luxury-home MLTT revenue to roughly $152 million annually. The city faces persistent budget pressure from TTC operating costs, shelter funding, and affordable housing commitments.
- Targeting. The change applies to roughly the top 2% of Toronto residential transactions by price — a narrow base of ultra-high-value buyers.
- Housing affordability signalling. Council framed the increase as a contribution to affordable-rental funding and the school food program, tying the political justification to broader housing and social spending.
Seven councillors dissented, largely on the grounds that it further suppresses a luxury resale segment that is already soft, and that it discourages mobility among older households looking to downsize out of high-value homes.
What this doesn't change
A few things worth being clear about — because several clients have asked:
- The Ontario provincial Land Transfer Tax is unchanged. Only the Toronto municipal portion is affected.
- Homes under $3M are unaffected. The vast majority of GTA transactions fall below this threshold.
- Commercial and multi-residential sales are unaffected by this specific change. Those have separate rate structures.
This is a narrowly targeted increase on a small slice of the market, but at the top of that slice the dollars get very large very fast. If you or someone in your network is in the $3M+ buying or selling window for 2026, the timing math is now a real variable.
Questions on a specific property or closing-date scenario? Reach out — happy to run the numbers.
Sources
- City of Toronto Council — Agenda Item 2025.EX28.1
- City of Toronto — Municipal Land Transfer Tax Rates & Fees
- CBC News — Toronto council approves luxury land transfer tax hike
- CP24 — Council approves Chow's hike on land transfer tax for luxury homes
- Royal LePage — Toronto introduces new land transfer tax brackets
- Toronto Life — Chow's plan to go after luxury homes with higher LTT
