Toronto City Council passed an amendment on December 17, 2025 introducing graduated Municipal Land Transfer Tax (MLTT) rates for high-value residential properties containing one or two single-family residences. The new rates take effect April 1, 2026. For Toronto-area owner-managers — many of whom are weighing a personal home purchase or sale alongside year-end corporate decisions — this is a dated, concrete change worth factoring into anything closing after April 1. It arrives at the same time as the usual December corporate year-end planning window, so this post covers both: the MLTT change itself, and the practical checklist worth running before your fiscal or calendar year closes.
The graduated MLTT rates, in detail
Toronto's MLTT applies to all property purchases in the city, on top of Ontario's provincial Land Transfer Tax. Historically it used a single rate schedule for all residential property. The December 17 amendment splits that schedule for single-family homes (one or two units) valued above $3 million, introducing five new graduated brackets on top of the existing rates:
| Value of consideration | MLTT rate |
|---|---|
| Up to $55,000 | 0.5% |
| $55,000.01–$250,000 | 1.0% |
| $250,000.01–$400,000 | 1.5% |
| $400,000.01–$2,000,000 | 2.0% |
| $2,000,000.01–$3,000,000 | 2.5% |
| $3,000,000.01–$4,000,000 (new, effective April 1, 2026) | 4.40% |
| $4,000,000.01–$5,000,000 (new, effective April 1, 2026) | 5.45% |
| $5,000,000.01–$10,000,000 (new, effective April 1, 2026) | 6.50% |
| $10,000,000.01–$20,000,000 (new, effective April 1, 2026) | 7.55% |
| Over $20,000,000 (new, effective April 1, 2026) | 8.60% |
Source: City of Toronto — Municipal Land Transfer Tax & Municipal Non-Resident Speculation Tax: Rates & Fees.
The brackets up to $3,000,000 are unchanged. The new graduated rates apply only to properties with one or two single-family residences — non-single-family residential properties (condos in larger buildings, multi-unit residential beyond a duplex) continue under the existing flat schedule, which tops out at 2.0% above $400,000. This is a tax targeted specifically at high-value detached and semi-detached homes, not at commercial property or investment real estate generally.
Why the April 1 effective date matters for a December decision
Because Council decided this in mid-December but delayed the effective date to April 1, 2026, there is a roughly three-and-a-half-month window where the old rate schedule still applies. For a Toronto-area owner-manager or their family already in the process of buying a home valued above $3 million, the difference between closing before and after April 1 is substantial: a $5 million purchase closing under the old rules pays MLTT at rates topping out at 2.5% above $2 million; the same purchase closing after April 1 pays the new graduated rates, reaching 5.45% on the portion between $4 million and $5 million. On a purchase of that size, that difference is worth budgeting for explicitly, not discovering at closing. Anyone with an accepted offer or an active search for a home in this range should confirm the anticipated closing date against April 1 with their real estate lawyer now.
The Municipal Non-Resident Speculation Tax (MNRST) — a separate 10% tax on the purchase price for foreign buyers of certain residential property, in effect since January 1, 2025 — is unaffected by this change and continues to apply on top of MLTT where relevant.
December is also year-end planning season — three items already on the calendar
Independent of the MLTT change, December is the natural checkpoint for Toronto owner-managers to confirm their corporate and personal tax position before the calendar closes, particularly given two already-confirmed 2026 changes that reward planning now:
- The Ontario small business limit rises from $500,000 to $600,000 on January 1, 2026. If your corporation was bumping against the old $500,000 ceiling on active business income, more of your 2026 income will qualify for the reduced small business rate from day one of the new year — worth confirming your instalment estimates reflect this rather than the old limit. See our guide to the small business deduction limit for how the federal and Ontario limits interact.
- The Ontario small business rate itself falls from 3.2% to 2.2% on July 1, 2026, prorated for any fiscal year straddling that date. If your corporation has an off-calendar year-end, this is a good moment to ask how your accountant plans to handle the proration, rather than finding out at filing time. Model both the current and post-cut rates with our corporate tax calculator.
- Capital purchases and bonus/dividend timing. As with any year-end, confirm whether planned equipment or asset purchases should close before December 31 for this year's write-offs, and whether a salary/bonus/dividend mix set earlier in the year still matches your actual 2025 results now that the numbers are close to final.
What Toronto-area owners should do before year-end
- If you're buying or selling a single-family home above $3 million: confirm the anticipated closing date against April 1, 2026 with your lawyer, and budget for the graduated rate if closing falls after that date.
- If your corporation was near the old $500,000 small business limit: confirm your 2026 instalment planning already reflects the $600,000 limit taking effect January 1.
- If your fiscal year straddles July 1, 2026: ask specifically how the small business rate proration (3.2% before, 2.2% after) will be applied to your return.
- If you have planned capital purchases: confirm timing against your fiscal year-end for this year's versus next year's write-offs.
- If your compensation mix (salary vs. dividends) was set early in the year: revisit it now that 2025 results are largely known, rather than after year-end when adjustments are harder to make.
Key takeaways
- Toronto City Council approved graduated MLTT rates for single-family homes over $3 million on December 17, 2025, effective April 1, 2026, with new brackets reaching 8.60% above $20 million.
- Rates up to $3 million are unchanged; the new brackets apply only to one- or two-unit single-family residential property, not condos, multi-unit buildings, or commercial real estate.
- A purchase or sale above $3 million closing before versus after April 1, 2026 can mean a materially different MLTT bill — confirm your closing date now if you're in this range.
- The Ontario small business limit ($600,000 from January 1, 2026) and rate cut (2.2% from July 1, 2026) are both already confirmed and worth reflecting in year-end instalment and compensation planning.
- December is the practical checkpoint to align real estate closing timing, corporate tax positioning, and compensation decisions before the calendar year closes.
If you're weighing the timing of a high-value home purchase against the April 2026 MLTT change, or want your year-end corporate and personal tax position reviewed before December 31, RN Canada works with Toronto-area owner-managers remotely from our Edmonton and Vancouver offices on exactly this kind of planning.