When you buy a cottage, waterfront property, or any recreational real estate in Ontario, you pay Ontario Land Transfer Tax (LTT) at closing. The amount is based on the purchase price and follows a tiered rate structure. Unlike primary residence buyers who may qualify for a first-time buyer rebate, cottage buyers do not — the LTT on a cottage purchase is the full amount with no rebate available.
Ontario LTT uses a tiered (marginal) rate system, similar to how income tax brackets work. Each tier only applies to the portion of the purchase price within that range:
| Purchase Price | Marginal Rate |
|---|---|
| First $55,000 | 0.5% |
| $55,001 to $250,000 | 1.0% |
| $250,001 to $400,000 | 1.5% |
| $400,001 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
0.5% on first $55,000 = $275
1.0% on $55,001–$250,000 = $1,950
1.5% on $250,001–$400,000 = $2,250
2.0% on $400,001–$500,000 = $2,000
Total LTT: $6,475
0.5% on first $55,000 = $275
1.0% on $55,001–$250,000 = $1,950
1.5% on $250,001–$400,000 = $2,250
2.0% on $400,001–$900,000 = $100
Total LTT: $14,475
0.5% on first $55,000 = $275
1.0% on $55,001–$250,000 = $1,950
1.5% on $250,001–$400,000 = $2,250
2.0% on $400,001–$1,500,000 = $22,000
Total LTT: $26,475
0.5% on first $55,000 = $275
1.0% on $55,001–$250,000 = $1,950
1.5% on $250,001–$400,000 = $2,250
2.0% on $400,001–$2,000,000 = $32,000
2.5% on $2,000,001–$3,000,000 = $25,000
Total LTT: $61,475
Land Transfer Tax is paid at closing — when you take ownership of the property. Your real estate lawyer collects the LTT from you as part of the closing funds and remits it to the Ontario government. You cannot defer or finance the LTT; it must be paid in full from your own funds at closing.
This means you need to include LTT in your budget for closing costs, separate from your down payment. On a $750,000 cottage, that's approximately $10,975 in LTT — a significant sum that many first-time cottage buyers underestimate.
Waterfront properties in Ontario — particularly in Muskoka, Haliburton, the Kawarthas, and Georgian Bay — command premium prices. Given that many entry-level Muskoka waterfront properties start above $700,000, buyers should budget for LTT of $9,975 to $15,000+ even at entry price points. On the high end of the Muskoka Lakes market ($2M–$10M), LTT becomes a major line item: a $5 million cottage carries approximately $136,475 in LTT.
LTT on a cottage purchase is generally not tax deductible for personal-use recreational properties. If the cottage is a rental property and you're reporting rental income, there may be some ability to claim purchase costs as capital expenditures affecting your adjusted cost base — but this is a complex area and you should consult a tax professional.
Non-residents of Canada purchasing residential property in Ontario — including cottages — are subject to the Non-Resident Speculation Tax (NRST), which is 25% of the purchase price and applies on top of regular LTT. On a $1 million cottage, that's $250,000 in NRST alone. Canadian citizens and permanent residents are exempt regardless of where they currently live.
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Open KOHO Free — No Fees — Code 45ET55JSYAOntario Land Transfer Tax on a cottage purchase follows the same tiered rate structure as residential properties, but without any first-time buyer rebate. Budget LTT into your closing costs from day one — it's a significant expense that can't be deferred or financed. Use the calculator at the top of this page to estimate your LTT on any Ontario cottage purchase price.