Short answer
Toronto introduced higher graduated MLTT rates effective April 1, 2026 on portions above $3 million for residential property containing one or two single-family residences.
The closing problem buyers face
A buyer relies on an older calculator or a prior closing estimate for a luxury home and underestimates the municipal tax due by a substantial amount.
What the official rule says
Toronto’s official schedule shows rates beginning at 4.40% on the portion over $3 million to $4 million and rising through additional brackets, reaching 8.60% on the portion over $20 million.
What this does not guarantee
These are marginal rates on portions of consideration, not one rate applied automatically to the entire price. Property classification and registration date require legal confirmation.
A practical Ontario example
Illustration only: A $4.2 million Toronto home can fall partly into the ordinary MLTT brackets, partly into the 4.40% bracket and partly into the 5.45% bracket. Applying one percentage to the full price would be wrong.
What to do before the offer becomes firm
Use the current City schedule and obtain the lawyer’s calculation before signing a firm offer. Keep the tax separate from appraisal value, lender loan-to-value and qualification calculations.
- Which municipality and property type are involved?
- Who will be on title, and what are their citizenship, residency and ownership histories?
- Is the property resale, new, substantially renovated, rental, mixed-use or held by a business?
- Which taxes, rebates and adjustments has the lawyer confirmed in writing?
- How much verified cash remains after the deposit and every closing cost?
Rajiv’s broker perspective
A lender decides the mortgage amount under its credit, income, property and loan-to-value policies. The province, municipality, CRA and lawyer determine the applicable taxes and legal closing funds. Those are different decisions. I would calculate the full cash-to-close first, preserve a contingency and only then compare A-lender, alternative/B, MIC or private options if the complete borrower and property facts require another financing path. Borrowing a tax shortfall at the last minute can change debt ratios and approval.
Related: First-Time Buyer Rule Hub · Real Estate Centre · Updates & Rules Centre
Could closing costs change the mortgage plan?
Send Rajiv the price, municipality, property type, deposit, title holders and available closing cash. He can pressure-test the funds-to-close and identify the tax or legal questions that should be confirmed before you commit.