Toronto's private-apartment vacancy rate rose from 2.5% to 3.0% and average rent from C$1,850 to C$1,913 between October 2024 and October 2025, per CMHC's Rental Market Survey. Toronto is one of the only Canadian cities where a buyer pays land transfer tax twice — once to Ontario and once to the City of Toronto — a real closing-cost drag on the cap rate math above.
Toronto's rental market: what CMHC and StatCan actually show
The CMHC October 2025 Rental Market Survey puts the Toronto CMA's purpose-built private-apartment vacancy rate at 3.0% (up from 2.5% a year earlier) with average rent across all bedroom types at C$1,913 (up from C$1,850). That is the purpose-built rental universe only — condominium units rented out by individual owners are not in this survey.
For the condo segment specifically, Statistics Canada's experimental asking-and-paid-rent table reported a 2-bedroom apartment in Toronto CMA asking C$2,650 versus a average paid rent of C$2,160 as of April 2026 — a roughly C$490 gap between what a unit lists for on turnover and what the average sitting tenant actually pays. One constraint on that gap: Ontario's 2026 rent increase guideline is 2.1%, the ceiling a landlord can raise a sitting tenant's rent without Landlord and Tenant Board approval — but only for units first occupied for residential purposes before November 15, 2018. Anything built and occupied after that date is exempt from rent control entirely, so its rent can be set at market on every renewal.
For underwriting, that means a Toronto condo's realistic year-one NOI depends heavily on its exemption status: a newer tower (post-2018 first occupancy) can be repriced to the StatCan asking figure at turnover, while an older building is capped at guideline increases on the existing tenant's paid rent.
Ontario and Toronto land transfer tax — the double tax
Every Ontario buyer pays the provincial land transfer tax. Toronto buyers pay a second, near-identical Municipal Land Transfer Tax (MLTT) on top, on the same purchase price. No other city page in this series carries that second layer.
| Bracket | Rate |
|---|---|
| Up to C$55,000 | 0.5% |
| C$55,000 – C$250,000 | 1.0% |
| C$250,000 – C$400,000 | 1.5% |
| C$400,000 – C$2,000,000 | 2.0% |
| Above C$2,000,000 (1-2 unit residential land) | 2.5% |
Ontario.ca, calculating land transfer tax, effective for registrations from January 1, 2017.
| Bracket | Rate |
|---|---|
| Up to C$55,000 | 0.5% |
| C$55,000 – C$250,000 | 1.0% |
| C$250,000 – C$400,000 | 1.5% |
| C$400,000 – C$2,000,000 | 2.0% |
| C$2,000,000 – C$3,000,000 | 2.5% |
| C$3,000,000 – C$4,000,000 | 4.40% |
| C$4,000,000 – C$5,000,000 | 5.45% |
| Above C$5,000,000 (up to further bands to C$20,000,000+) | 6.50%–8.60% |
City of Toronto, MLTT rates and fees, page last modified April 7, 2026.
First-time buyers get a rebate against each tax separately: up to C$4,000 off the provincial tax and up to C$4,475 off Toronto's MLTT — C$8,475 combined. Neither rebate applies to an investor who has owned property before, which is most buyers of a rental unit.
Toronto property tax on a rental purchase
The City of Toronto's 2026 residential property tax rate is a combined 0.767311% of the property's MPAC-assessed value. On the C$650,000 condo above, using purchase price as a stand-in for assessed value (MPAC's Current Value Assessment can run above or below the sale price), that works out to roughly C$4,987 a year — an operating expense that belongs in the NOI calculation above the line, not after it.
Toronto's short-term rental bylaw limits what this unit can earn
Before modelling Airbnb-style income into a Toronto cap rate, check the bylaw: the City of Toronto permits short-term rentals only in a host's principal residence, defined as the address on the host's bills, ID, taxes and insurance. A whole-unit rental is capped at 180 nights a calendar year, and registration costs a non-refundable C$390. For a pure investment condo the owner doesn't live in, none of that applies — the unit cannot legally be listed as a short-term rental at all, and the honest NOI basis is long-term rent at the CMHC and StatCan figures cited above, not a nightly rate.
Toronto is the one major market where construction costs are falling
Toronto's residential construction costs moved down, not up, in the most recent quarter, while the national index rose. Statistics Canada's Q2 2026 building construction price index shows Toronto costs falling 0.8% for the quarter, against a 0.5% national increase and gains of 2.0% or more in Québec, Montréal, Halifax, Saskatoon and Regina. Vancouver was the only other market to post a decline, at -0.2%.
That's a meaningful data point for anyone weighing whether to buy at Toronto's cap rate and fund near-term renovation or unit-turnover work: the capital-expenditure side of the deal is currently getting cheaper here, even while the acquisition price and land transfer tax burden (covered above) remain the highest in this comparison set.
Methodology
Vacancy and average-rent figures are from CMHC's October 2025 Rental Market Survey (purpose-built private apartments, all bedroom types, Toronto CMA total). Asking-versus-paid rent is Statistics Canada's experimental table 46-10-0092-01 for 2-bedroom apartments, April 2026 vintage — a different survey and a later date than the CMHC figures, so the two are not blended into one number. Land transfer tax, property tax and short-term rental figures are current as of the 2026 rate schedules and bylaw pages cited inline. The C$650,000 purchase price in the worked examples is illustrative, chosen to sit inside every bracket shown; it is not a claimed average sale price for Toronto.
Sources
- CMHC — Rental Market Survey Data Tables, Toronto 2025 — accessed 2026-09-21
- Statistics Canada — Table 46-10-0092-01, asking and paid rent — accessed 2026-09-21
- Government of Ontario — Rent increase guideline — accessed 2026-09-21
- Government of Ontario — Calculating land transfer tax — accessed 2026-09-21
- Government of Ontario — Land transfer tax refunds for first-time homebuyers — accessed 2026-09-21
- City of Toronto — Municipal Land Transfer Tax rates and fees — accessed 2026-09-21
- City of Toronto — MLTT rebate opportunities — accessed 2026-09-21
- City of Toronto — Property tax rates and fees — accessed 2026-09-21
- City of Toronto — Short-term rental operators/hosts — accessed 2026-09-21
- Statistics Canada — The Daily, Building construction price indexes, Q2 2026 — accessed 2026-09-21