The mayor wants the extra tax revenue to fund a school food program and keep TTC fares frozen
Toronto buyers eyeing $3m‑plus properties may soon face noticeably higher closing costs, as Mayor Olivia Chow moves to ratchet up the city’s “luxury homes tax” on high‑end residential deals.
Chow wants purchasers of homes worth more than $3m to pay higher Municipal Land Transfer Tax rates starting April 1, with the biggest increases landing on properties above $20m, according to BNN Bloomberg.
The proposal targets residential properties with at least one, and not more than two, single‑family residences.
Under the plan, the existing luxury brackets would all rise by roughly 0.90 to 1.10 percentage points, BNN Bloomberg reports.
For 2026, the proposed total tax rates on the municipal portion for qualifying purchases would be:
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$3m–$4m: 4.40 percent
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$4m–$5m: 5.45 percent
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$5m–$10m: 6.5 percent
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$10m–$20m: 7.55 percent
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Above $20m: 8.6 percent
CBC News reports that the higher rates would apply to homes purchased from $3m to more than $20m, with the rate stepping up as values rise.
Only 1,164 buyers — just under 2 percent of purchasers — paid the current levy last year, generating $138.2m for the City of Toronto, as per BNN Bloomberg.
City projections suggest the higher rates would bring in an extra $13.8m a year starting April 1, lifting total luxury homes tax revenue to about $152m in 2026.
Chow is framing the move as a way to shore up affordability measures rather than cut services.
“In uncertain times, as the cost of living rises, families need a break,” she said in a statement cited by BNN Bloomberg, adding that the funds will help save families $1,200 on groceries and transit.
She said she is asking “the wealthiest two per cent of property buyers, just half of one percent of Toronto residents, [to] contribute a bit more,” so the city can “invest in services families rely on,” according to CBC News.
The mayor says the additional revenue will support school nutrition programs, a third consecutive TTC fare freeze, more affordable rental homes, Sunday library hours and additional youth recreation, according to BNN Bloomberg.
The Toronto Regional Real Estate Board (TRREB) opposes the proposal.
TRREB has long been against the municipal land transfer tax and does not support another hike, Jason Mercer, the board’s chief information officer, told CBC News.
He warned that even at the high end, a larger upfront tax can keep buyers from moving up the ladder, which in turn can limit the supply of “more mid-range houses” for other households.
In a news release cited by CBC News, TRREB instead urged the city to increase the land transfer tax rebate for first‑time homebuyers.
Chow plans to present the motion to the Executive Committee next week, with the meeting set for Tuesday, as reported by BNN Bloomberg.
If council ultimately approves the changes, luxury buyers and their advisers will need to factor the higher municipal land transfer tax into 2026 transaction planning.
