What the April 2026 Toronto Luxury Land Transfer Tax Actually Costs a Move-Up Buyer

Case study · Davisville Village

Picture a family in Davisville. They have outgrown their home, it is worth around $2 million, and they have found the next one — a $3.5 million house a few streets over. They are excited. Then their lawyer walks them through the closing costs, and the land transfer tax line stops them cold.

Here is why, and what it actually costs in 2026.

Toronto taxes the same purchase twice. Every buyer inside the City of Toronto pays the Ontario provincial land transfer tax and a separate Toronto municipal land transfer tax. On most homes the two are roughly equal, so the bill is about double what someone pays in Oakville or Vaughan, where there is no municipal tax at all.

On April 1, 2026, the city raised the municipal rate on luxury homes. The increase applies only to the portion of the price above $3 million, on a sliding scale — 4.40% on the slice from $3M to $4M, rising to 8.60% above $20M. It is graduated, like income tax brackets, so you are never taxed at the top rate on the whole price.

So what does our Davisville family pay on the $3.5M purchase? About $157,450 in total land transfer tax — roughly $73,975 to the province and $83,475 to the city. Because they have owned before, there is no first-time buyer rebate, and the whole amount is due in cash on closing day. It cannot be rolled into the mortgage.

The April change cost them about $4,500 more than the same purchase would have before April 1 — and the gap grows fast with price: roughly $9,000 more on a $4M home, $18,500 more on a $5M home. The one detail people miss is that the tax is triggered by the closing date, not the offer date. A deal agreed in March but registered in April pays the new rates.

And land transfer tax is only one line. On the sell side, this family pays commission (5% + HST), legal fees, and any mortgage penalty. If their purchase closes before their sale funds arrive, they may need bridge financing for the gap. Add it all up and the transaction costs on a $2M-to-$3.5M move land somewhere around $200,000–$260,000 on top of the price difference — which is exactly the number that surprises people who only budgeted for the gap between the two homes.

None of this means moving up is a bad idea. It means the smart move is to run your real numbers before you make an offer, so nothing at the closing table is a surprise.

See your own numbers in under a minute with our free 2026 Toronto cost calculator — it shows your land transfer tax, total cash-to-close, and monthly carrying cost.
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For the full set of cost questions move-up buyers ask, see our complete guide: What It Really Costs to Sell and Buy a Home in Toronto.