Toronto’s Escalating Luxury Land Transfer Tax

Preparing for the April 2026 MLTT Hikes

By David Young

In a continued effort to address municipal budget pressures, Toronto City Council has officially approved a further expansion of the graduated Toronto Municipal Land Transfer Tax (MLTT). Effective April 1, 2026, purchasers of high-value residential properties will face a significantly steeper tax bill at the time of closing.

This latest move marks the second major adjustment to the "luxury" brackets in just over two years. The City first moved away from its flat 2.5% top rate on January 1, 2024, when it introduced the initial graduated tiers for homes exceeding $3 million. While that first increase was viewed by many as a one-time "fair share" adjustment, the 2026 hike signals that the MLTT has become an additional revenue lever for the city’s transit and housing initiatives.

The New Graduated Structure

While the standard rates remain unchanged for mid-market homes, the brackets for properties exceeding $3 million will see a second significant bump—increasing by roughly 0.9% to 1.1% across various tiers compared to the 2024 levels.

The new municipal rates for residential properties (containing 1 or 2 single-family residences) are as follows:

Property Purchase Price	2024 MLTT Rate	New April 2026 MLTT Rate
Rates under $3,000,000	No change	No change
$3,000,000 to $4,000,000	3.5%	4.40%
$4,000,000 to $5,000,000	4.5%	5.45%
$5,000,000 to $10,000,000	5.5%	6.50%
$10,000,000 to $20,000,000	6.5%	7.55%
Over $20,000,000	7.5%	8.60%

Note: These rates are marginal, applying only to the portion of the value within each specific bracket, and are payable in addition to the Provincial Land Transfer Tax.

An example of the financial impact

The "compounding" nature of these tax hikes means that the "cash to close" for luxury buyers has shifted dramatically in a very short window. For example in a $5 million residential purchase:

• Prior to 2024: The municipal tax was approximately $111,475;
• Current (2024-2025): The same purchase incurs approximately $141,475;
• Post-April 2026: The municipal tax bill will jump to roughly $159,975.

When combined with the provincial portion, a $5 million buyer in the City of Toronto must now budget for $271,450 in total Land Transfer Taxes—creating a widening gap between the cost of buying in Toronto versus neighboring cities like Vaughan or Markham - where you’d only pay the Provincial Land Transfer Tax of $111,475.

Anticipated Implications for Buyers

As we approach the April 1st, 2026 implementation date we anticipate a surge in luxury closings by the end of March 2026. Buyers currently in negotiations should pay close attention to the Closing Date in their Agreement of Purchase and Sale (APS). Regardless of the date of signing the APS, if the Closing Date is after April 1, 2026 the increased rates apply.

If you are considering a high-value transaction in 2026, please reach out to David Young at 365 509 2029 x 106 or dyoung@sorbaralaw.com to discuss your closing costs well before you remove conditions.