Buying Land in Ontario: Steps, Costs and How to Finance It

Buying land in Ontario follows the same basic path as buying a home, with more homework. You find a parcel, confirm what you can legally build on it, write a conditional offer, line up a larger down payment than a house would need, and close through a real estate lawyer. The extra checks are zoning, road access, septic and well options, conservation authority rules and HST, and they decide whether the land is a good buy or an expensive mistake.

Financing is also different. Most lenders treat land as riskier than a finished home, so terms are shorter and the down payment is higher. LendingHub works with various lenders and financial institutions to arrange raw land loans and land development loans in Ontario, so you can compare lenders for land loans before you commit to a parcel.
 

Types of Land You Can Buy in Ontario

Land listings use a few terms loosely, so it helps to know what each one usually means:

• Raw land: Undeveloped land with no hydro, water or sewer service and often no road access. It is usually the cheapest per acre and the hardest to finance and build on.
• Vacant land: Land with no building on it, but it may already have road access or nearby services.
• Serviced lot: A lot, often in a subdivision or town, with municipal water, sewer and hydro at the lot line. These are the easiest to build on and to finance.
• Rural or agricultural land: Larger parcels zoned for farming or rural uses, where a new house may be limited by zoning or provincial plans.
• Crown land: Land owned by the province. Ontario sells or rents Crown land only in some cases, and it does not accept applications for new homes or cottages.
   

How to Buy Land in Ontario: Step by Step

1. Set your budget for the whole project

Price the land and everything after it. If you are buying land in Ontario to build a house, your budget needs to cover the lot, closing costs, surveys and tests, permits, development charges, servicing (driveway, hydro, well, septic) and the build itself. A cheap parcel that needs a long driveway and a new septic system can cost more in the end than a serviced lot.

2. Talk to a lender early

Get a sense of how much you can borrow and how much cash you need before you make offers. Land loans have their own rules, so a pre-approval for a regular mortgage does not tell you much. Our guide on getting a mortgage for land explains how lenders look at different land types.

3. Build your team

Most buyers work with a real estate agent who knows rural or vacant land, a real estate lawyer, an Ontario Land Surveyor and, for building lots, a builder or designer. Under Ontario's Trust in Real Estate Services Act (TRESA), a buyer either becomes a brokerage's client or deals as a self-represented party, and agents must give buyers RECO's information guide.

4. Research the parcel before you visit

Ask for the listing details, the legal description and any existing survey. Call or check the website of the local municipality's planning department to confirm the zoning. Look at whether the land sits near a river, lake, wetland or steep slope, since those areas are often regulated by a conservation authority.

5. Write a conditional offer

Land offers should carry conditions that give you time to check the parcel. Common conditions include:

• Financing: Time to get a firm approval from your lender.
• Survey: A current survey by an Ontario Land Surveyor that shows the true boundaries.
• Zoning and permits: Confirmation that your planned use and building are allowed.
• Septic and well: Soil and site suitability for a septic system and a source of water.
• Lawyer review: Your lawyer's review of title, easements and access.

Your lawyer or agent will word these conditions. Use the condition period to run every check in the next section, and do not firm up the deal until they are done.

6. Firm up, then close

Once the conditions are met, you waive them and the deal becomes firm. On closing day, your lawyer registers the transfer, pays the land transfer tax and releases the funds. After that, the land is yours and the permit work for your build can begin.
 

Due Diligence Checklist Before You Buy Land

Check each item before your conditions expire.

Zoning and what you can build

Zoning by-laws control how land can be used, where buildings can go, minimum lot sizes and setbacks from lot lines. If your plan does not fit the zoning, the municipality will refuse the building permit. Small departures from the rules can sometimes be approved through a minor variance from the committee of adjustment, but that takes time and is never certain.

If you want to split a large parcel, you need a consent (often called a severance) from the municipality or its committee. Ontario's planning guide says the conditions of a consent must be met within two years. Some rural land is also covered by provincial plans such as the Greenbelt, which includes the Oak Ridges Moraine and Niagara Escarpment areas, and these can limit new homes.

Road access

Confirm the land fronts on a road the municipality maintains all year. Some parcels only touch an unopened road allowance or a seasonal road. Municipalities usually do not maintain unopened road allowances, and using one often needs council approval and an agreement. Rules vary by township, so ask the municipality directly.

Conservation authority rules

Parts of many properties fall inside areas regulated by a local conservation authority, such as floodplains, wetlands, shorelines and valley slopes. Under Ontario Regulation 41/24, you need a permit from the conservation authority to build, grade, place fill or alter a watercourse in these areas. Ask the conservation authority whether any part of the parcel is regulated before you buy.

Septic system and water

Rural lots without municipal services need a septic system and usually a private well. Every new sewage system needs a site evaluation and a permit, and Part 8 of the Ontario Building Code sets the design rules, including minimum distances from wells. The permit is usually issued by the municipality, and sometimes by the health unit or conservation authority.

For water, check the province's well records map for nearby wells. Public Health Ontario offers free bacterial testing of private well water, which is useful if the land already has a well.

Survey and boundaries

The Association of Ontario Land Surveyors says only a survey by a licensed surveyor can legally define what you bought. A current survey shows the boundaries, easements and any encroachments. The AOLS also says title insurance is not a replacement for a survey, so ask your lawyer whether you need a new one.

Title, easements and utilities

Your lawyer searches the title through Ontario's land registry to confirm the seller owns the land and to find mortgages, liens, easements or rights of way. Before you dig test holes, contact Ontario One Call for free utility locates at least five business days ahead.

Buying land in Ontario to build a house

If a home is the goal, add a few checks:

• Building permit: Needed for a new house and for a septic system. Zoning counts as applicable law, so the permit depends on it.
• Highway corridors: Land near a provincial highway may need permits from the Ministry of Transportation for entrances and buildings.
• Servicing costs: Get quotes for hydro, driveway, well and septic before you firm up.
• Development charges: Many municipalities charge these when you build. Amounts and timing vary, so ask the municipality.

Costs of Buying Land in Ontario

The price of the land is only the start. Plan for these costs too, and share them with your lender or a mortgage brokerage like LendingHub before you make an offer.

Ontario land transfer tax on land

Ontario charges land transfer tax on most land purchases, including vacant land. As of November 2026, the provincial rates are:

An extra 2.5% rate applies above $2 million only to land with one or two single family homes, so it does not usually apply to vacant land. For example, a $300,000 lot carries $2,975 in Ontario land transfer tax, and a $400,000 lot carries $4,475.

The provincial first-time buyer refund of up to $4,000 is tied to buying a home you live in within nine months. The rules do not clearly cover a vacant lot you plan to build on later, so ask your lawyer before you count on it. If the land is in Toronto, you also pay municipal tax. Read our guide to Toronto's land transfer tax for how the two taxes add up.

Is there HST on land in Ontario?

It depends on who is selling and why. The Canada Revenue Agency says most sales of vacant land by individuals are exempt, for example land the seller held for personal use. The sale becomes taxable when, among other cases:

• Business use: The land was capital property used mainly in a business.
• Business sale: It is sold in the course of a business.
• Subdivision: The seller split it into more than two parts (with some exceptions for a part sold to a relative for personal use).
• Election: The seller bought it to resell and chooses to charge tax by filing an election.

Land sold by a builder or a business is often taxable. When HST applies in Ontario, the rate is 13%, which is a large sum on a high-priced lot. Ask your lawyer to confirm the HST status in the agreement before you sign, and make clear whether the price includes HST.

If you build your own home on the land, rebates may help on the build side. The federal First-Time Home Buyers' GST/HST Rebate covers owner-built homes where construction started on or after March 20, 2025 and before 2031, and the home is substantially completed before 2036. Eligibility rules are strict, so check the CRA page before you plan around it.

Buying Land in Ontario: Down Payment and Financing

The 5% minimum down payment that many buyers know applies to insured mortgages on homes. Our article on minimum down payment rules explains how those home rules work. Land loans are usually uninsured. Even on a finished home, federally regulated banks cannot lend more than 80% of the value without mortgage insurance, and lenders usually ask for a larger share up front on land.

In practice, the down payment for buying land in Ontario is often 20% to 35% for a serviced residential lot and can be 50% or more for raw land. These are typical ranges only. Each lender sets its own rules based on the land, its location, your credit and your plans.

Common ways to pay for land include:

• Land loan or land mortgage: From a bank, credit union or private lender, often with a shorter term and higher rate than a home mortgage.
• Construction mortgage: If you will build soon, a construction mortgage loan releases funds in stages as work moves forward, with the land as part of the security.
• Home equity: Some buyers borrow against a home they already own to buy land.
• Seller financing: Some sellers carry part of the price. Have your lawyer draft the terms.
• Cash: Paying cash for the land can make building financing easier later.

If you are weighing a finished home against building on land, our comparison of home loan vs construction loan shows how each one works. A mortgage broker can compare land and construction options with several lenders at once.

Tips for First-Time Land Buyers

• Visit more than once: See the land in spring and after heavy rain if you can, to spot standing water and access problems.
• Walk the boundaries: Do it with the survey in hand, so you know what you are buying.
• Get quotes before you firm up: Servicing a raw lot can cost more than the land itself.
• Plan your timeline: Some lenders expect you to start building within a set period, so ask before you sign.
• Keep a buffer: Carrying costs such as property tax and loan interest start on closing, even if the build starts a year later.

Can Non-Canadians Buy Land in Ontario?

The federal ban on non-Canadians buying residential property is set to end on January 1, 2027. Budget 2026 proposes extending it to January 1, 2029 for existing homes while exempting new homes, but that is not yet law. Since March 27, 2023, the ban has not applied to vacant land zoned for residential or mixed use.

Ontario's 25% Non-Resident Speculation Tax applies to land with one to six single family homes, so it does not usually apply to vacant land. Rules can change, so non-residents should get legal advice before making an offer.

FAQ About Buying Land in Ontario

1. Can you get a mortgage to buy land in Ontario?

Yes. Banks, credit unions and private lenders offer land loans, but they usually ask for a larger down payment and offer shorter terms than a home mortgage. Serviced lots are the easiest to finance and raw land is the hardest.

2. Is buying land in Ontario a good investment?

It can be, but land earns no income while you hold it, costs property tax each year and can be harder to sell than a home. Its value depends on zoning, access, servicing and local demand. Treat it as a long-term plan and get advice for your situation.

3. Do I need a lawyer to buy land in Ontario?

A real estate lawyer handles the title search, closing documents, registration and land transfer tax payment. Given the zoning, access and HST questions on land, legal advice is worth it on every land purchase.

4. How long does it take to build after buying land?

It depends on permits, any minor variance or conservation authority approval, and your builder. Under the Building Code, the municipality has 10 days to issue or refuse a permit for a house once the application is complete, but zoning changes, severances or conservation permits can add months.

Start Your Land Purchase With the Right Financing

Buying land in Ontario rewards careful buyers. Confirm the zoning, access, servicing and taxes before you firm up, and know your financing before you make the offer. If you want help comparing raw land and land development loans, talk to LendingHub about your plans and the parcel you are looking at.

This article is general information only and is not legal, tax or financial advice. Speak with a licensed mortgage professional, real estate lawyer or tax advisor about your situation.