The rate a Forest Hill buyer pays on the part of the price above $3 million is set by the date the transfer is registered. The date the offer is signed doesn't decide it. Toronto's revised Municipal Land Transfer Tax brackets apply to transactions registered, or otherwise becoming taxable, on or after April 1, 2026. Because the tax is tied to the transfer date, the closing date became a term with a dollar value, and the bill itself became part of the price discussion.
In central Toronto's C03 and C04 districts this fall, sellers have plenty of competition, which gives that discussion more room. The higher tax is legally the buyer's bill. In practice, a share of it is being settled at the negotiating table.
The date on the transfer decides the rate
The clearest public example is from a nearby street. In January, The Globe and Mail reported on a five-bedroom Lawrence Park house. It had 6,100 square feet of living space and a saltwater pool, and it sold for $6,413,558. That was about 3.5 per cent below its most recent asking price of $6.645 million. According to the Globe, the listing broker said the coming increase was "100 per cent part of the negotiation." The two sides agreed to close on March 31, one day before the new rates took effect, even though the sellers would have preferred May or June.
The broker estimated the earlier closing took about $64,000 off the tax bill. If you run that sale price through the City's published old and new municipal brackets, the difference in the municipal tax alone comes to roughly $32,600. Either way, the closing date was worth five figures to the buyer, and the sellers traded their preferred timeline to get the deal done.
Every Forest Hill deal closing now falls under the April schedule. Because the rate still depends on what is registered and when, the price and the closing date remain the two terms the tax can move.
What the April change costs, slice by slice
The tax is marginal. Each rate applies only to the part of the price inside its bracket. A $3.2 million house pays the 4.40 per cent rate on $200,000, not on $3.2 million. Here are the current City rates for a property with one or two single-family residences, next to the schedule they replaced.
| Portion of the price | Rate before April 1, 2026 | Rate from April 1, 2026 |
|---|---|---|
| Over $2M up to $3M | 2.5% | 2.5% |
| Over $3M up to $4M | 3.5% | 4.40% |
| Over $4M up to $5M | 4.5% | 5.45% |
| Over $5M up to $10M | 5.5% | 6.50% |
| Over $10M up to $20M | 6.5% | 7.55% |
| Over $20M | 7.5% | 8.60% |
Up to $3 million, nothing changed. The municipal tax on a $3 million purchase is $61,475 under both schedules. Above that, the increase grows with each slice:
- $3.5 million: $83,475 in municipal tax, up $4,500
- $4 million: $105,475, up $9,000
- $5 million: $159,975, up $18,500
- $6.5 million: $257,475, up $33,500
The provincial land transfer tax comes on top of the municipal one. Ontario's schedule tops out at 2.5 per cent on the portion above $2 million for land with one or two single-family residences. The Province has no brackets above $3 million, so its tax rises in a straight line from there. On a $4 million Forest Hill house, the provincial tax is $86,475. Combined with the municipal $105,475, the buyer's land transfer taxes come to about $191,950 before legal fees.
This structure produces a particular pattern. For a $3.4 million purchase, the April change adds only $3,600. For a house on one of the larger Forest Hill lots trading well above $5 million, it adds tens of thousands of dollars, which is enough to reopen a price conversation that had seemed settled.
Why the cost lands in the price conversation this fall
The tax is charged to the buyer. Who absorbs it depends on how much choice each side has. In the Globe piece, one broker said that "one way or another, the seller is going to be paying it," because the cost gets factored into what buyers will offer. Whether that holds depends on supply, and the most recent TRREB figures show plenty of it.
TRREB doesn't publish figures for Forest Hill alone. Its detached tables are reported by district, so the numbers below for central districts C03 and C04 are district totals, not neighbourhood counts. For detached houses in September 2026, released October 6:
| September 2026, detached | C03 | C04 |
|---|---|---|
| Sales | 21 | 37 |
| Average price | $2,521,988 | $2,650,889 |
| Median price | $1,755,000 | $2,335,000 |
| Active listings | 123 | 181 |
| Average sale-to-list price | 96% | 97% |
In September, C03 had about six active detached listings for every sale and C04 had about five. Across both districts, sales came in at an average of 96 to 97 per cent of list price. With that much choice, a buyer looking at a $4.5 million house is also looking at its competitors. Raising the extra tax in the offer is a routine part of the conversation.
The medians also show who the luxury brackets actually affect. In September 2026 the typical detached sale in either district was below $3 million, and C04's median was $2,335,000. Averages well above the medians mean a smaller group of high-priced sales is pulling the average up. The August 2026 figures make this even clearer. C03 had a $3,329,722 average against a $1,484,000 median on 18 sales. The increased tax falls on that upper group. Across the two districts, roughly 40 to 60 detached sales a month this summer included only a minority that crossed the threshold. TRREB's district tables don't separate out sales above $3 million, $4 million or $5 million.
The rule is still under debate
When Council adopted the revised brackets on December 16 and 17, 2025, it also asked the Chief Financial Officer to report on options for rescinding the increase if Toronto reaches a new deal addressing its structural operating deficit. Council also asked for a review of the First-Time Homebuyer Rebate. The City's rebate page still lists a maximum municipal rebate of $4,475.
The tax matters to the City's budget. Toronto's 2026 budget forecasts $850 million in MLTT revenue. The 2025 budget expected $985 million, and the forecast as of September 30, 2025 was $800 million. In a November 2025 letter, Mayor Olivia Chow said the luxury tiers affected 2 per cent of homebuyers and brought in $138 million in 2024. CBC Toronto reported that City staff expected the April increase to add $13.8 million in 2026.
The tax is also an issue in the mayoral campaign. CBC Toronto reported on October 2 that mayoral candidate Brad Bradford had proposed removing the MLTT on the first $1.1 million of every home's price, including homes above that amount. His team estimated the cost at $300 million. For a Forest Hill purchase, removing tax on the first $1.1 million would take a flat $18,475 off any price above that level, and it would leave the luxury brackets as they are. This is a campaign proposal, not City policy. The rates in force today are the April schedule.
What the agreement has to settle
Because the tax depends on the registration date and the price, a few terms in a Forest Hill agreement carry tax consequences:
- The closing date. It sets which rate schedule applies to the transfer. The Lawrence Park sale showed that one day can matter when rates change.
- The price relative to a bracket line. Under a marginal schedule, a few thousand dollars near $3 million, $4 million or $5 million only changes the rate on those few thousand dollars, so no price point produces a sudden jump in the bill.
- What is included in the price. The tax applies to the value of consideration, so how the deal is structured affects the base the tax is calculated on.
- The provincial calculation. It runs separately from the municipal one, and the two together make up the buyer's total.
Your real estate lawyer is the one to confirm exactly how each rule applies to a specific transaction.
A few direct questions
Does the higher rate apply to the whole price once a house passes $3 million? No. Under the City's schedule, each rate applies only to the portion of the price inside its bracket.
Is the municipal tax charged instead of the provincial one? No. Toronto's MLTT is charged in addition to Ontario's land transfer tax.
When did the luxury brackets first appear? The Globe and Mail reported that the tax on homes at $3 million and above has applied since January 1, 2024. The April 1, 2026 change raised those rates.
Could the rates change again? Council has asked staff to report on rescission options tied to a future fiscal deal, and the tax is a live mayoral campaign issue. No change has been enacted.
If you're pricing or bidding on a Forest Hill house near one of these brackets, Anita Springate-Renaud can work through the tax figures, closing date and price terms with you before they go into the offer. Let's connect.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
