As Toronto City Council considers a proposal to increase the municipal land transfer tax on higher-value homes, new Ipsos polling for the Toronto Regional Real Estate Board (TRREB) shows many Toronto residents are already frustrated by what they see as the City’s overreliance on the tax and its impact on housing affordability.
Mayor Olivia Chow has asked councillors to approve higher graduated rates for properties valued over $3 million. Chow argues that buyers of luxury homes can “chip in more” so the city can avoid placing additional financial pressure on working and middle-class families.
The proposal comes as TRREB warns that another hike will worsen affordability in a city where average home prices exceed $1 million.
Chow says luxury buyers can afford to contribute more
In her letter to council, Chow said the changes would build on steps the city has taken since she came into office in 2023 — to raise more revenue from high-value property purchases. She said the existing graduated taxes brought in $138 million in 2024 and affected only two per cent of homebuyers.
“It’s clear that the impact of our current economic uncertainty is not being evenly felt across our City,” Chow wrote. “Some continue to do very well. I’m asking the 2% of buyers purchasing luxury homes far beyond what average Torontonians can afford to chip in more. Those who can afford five or ten million dollar homes can afford to pay their fair share.”
Under her proposal, the new rates would be:
- 4.4 per cent on the value between $3 million and $4 million
- 5.45 per cent on the value between $4 million and $5 million
- 6.5 per cent on the value between $5 million and $10 million
- 7.55 per cent on the value between $10 million and $20 million
- 8.6 per cent on the value above $20 million
If approved, the new rates would take effect Apr. 1, 2026.
Chow said increasing the municipal land transfer tax (MLTT) on luxury properties “raises the cost to buy Luxury Homes incrementally – between 0.9% and 1.1% on the graduated rates listed below – to shift the cost of funding our city towards those who can afford it the most.”
Residents say housing taxes are already too high: TRREB
But new polling suggests Torontonians are increasingly concerned about the rising burden of housing-related taxes.
According to the Ipsos poll, 56 per cent of Toronto residents believe the City relies too heavily on the land transfer tax — putting it alongside property taxes as one of the most overused municipal revenue tools.
TRREB president Elechia Barry-Sproule says buyers are already paying thousands in taxes upfront.
“Municipal land transfer taxes take thousands of dollars out of the pockets of Toronto buyers,” she said. “With average home prices now exceeding $1 million, the City’s MLTT alone adds more than $17,000 to upfront closing costs of a home. Raising this tax will not make our City more affordable.”
Toronto is the only municipality in Ontario with both a municipal and provincial land transfer tax. Together, TRREB says the total bill for an average-priced home is about $34,000, making it one of the highest upfront housing tax burdens in North America.
TRREB CEO John DiMichele said increasing the tax has not been shown to improve affordability.
“Each time the City has increased the MLTT, supporters have claimed the additional revenue would help make rental and other forms of housing more affordable,” he said. “However, there is no data or evidence showing that higher housing taxes improve affordability.”
He added that higher MLTT rates can suppress supply by discouraging homeowners from selling, pushing more buyers into lower price ranges and increasing competition for entry-level homes.
First-time buyers squeezed
TRREB also pointed to Toronto’s stagnant first-time buyer rebate, which has not been updated since 2016. Today, a first-time buyer in Toronto purchasing an average-priced home pays more than $25,000 in land transfer taxes even after applying the rebate.
When the MLTT was introduced in 2008, that same buyer would have paid no municipal land transfer tax at all.
“Toronto homebuyers already face the highest land transfer tax burden in North America,” Barry-Sproule says. “Another increase to the MLTT will only make life more difficult for residents and move us further away from building an affordable, vibrant city.”
The proposal is scheduled to go before the Executive Committee on Dec. 9.
Jordana is the editor of Real Estate Magazine. You can reach her by email.
