The Luxury Threshold
- The 20% Rule: Homes over $1M require a full 20% down payment by law.
- Double LTT: Toronto properties pay both Provincial and Municipal Land Transfer Tax.
- The Closing Gap: You need roughly 4.5% of the price in raw cash on closing day.
Purchasing a $1 million property in Toronto places you in a very specific, punitive tax bracket. For New Home Buyers stretching to hit this mark, failing to properly estimate the closing costs can lead to financial disaster. In 2026, those costs have reached an all-time high due to municipal tax adjustments and uncapped development charges.
1. The Disappearance of CMHC Insurance
The moment a home price hits $1,000,000, you are no longer eligible for mortgage default insurance. This means you cannot buy with 5% or 10% down. You must provide a minimum 20% ($200,000) in liquid equity. While this lowers your monthly payment, it creates a massive "Capital Wall" for New Home Buyers trying to break into the detached or large-condo market.
2. The "Double Tax" Reality
If your $1M home is within the 416 area code (City of Toronto), you pay the Toronto Municipal Land Transfer Tax (MLTT) in addition to the Ontario Provincial LTT. While New Home Buyers receive a rebate of up to $4,475 on the municipal side and $4,000 on the provincial side, the progressive nature of the tax means you still face a massive bill.
On a $1,000,000 purchase, your total LTT bill after rebates is approximately $24,000. This is due in cash to your lawyer on closing day.
3. Line-by-Line: The $1M Closing Budget
| Closing Expense | Estimated Cost |
|---|---|
| LTT (Provincial + Municipal) | $24,475 (after FTHB rebates) |
| Capped Levies (Pre-con only) | $12,500 (Negotiated cap) |
| Utility Meters / Admin Fees | $2,500 |
| Tarion Enrollment Fee | $1,800 |
| Total Liquid Cash Required | $41,275 |