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Land Transfer Tax

Region: Ontario Answer # 396

Land transfer tax is a provincial tax on real estate purchases, which is paid by buyers. In addition to provincial land transfer tax, some municipalities, such as the City of Toronto, have their own municipal land transfer taxes (MLTT). Land transfer tax is not payable by the seller.

If you buy land or an interest in land in Ontario, you must pay Ontario’s land transfer tax, regardless of whether the transfer is registered at one of Ontario’s land registry offices. That said, there are limited circumstances where land transfer tax is not required.  These include:

  • certain transfers between spouses
  • certain transfers from an individual to their family business corporation
  • certain transfers of farmed land between family members
  • certain transfers of a life lease from a non-profit organization or a charity.

 

Toronto land transfer tax rates:

Effective for all conveyances and dispositions made on or after March 1, 2017, for property containing at least one, and not more than two, single family residences:

 

Value of Consideration MLTT  Rate
Up-to and including $55,000 0.5%
Over $55,000 up-to $250,000 1.0%
Over $250,000 up-to $400,000 1.5%
Over $400,000 up-to $2,000,000 2.0%
Over $2,000,000 2.5%

For all other property:

Value of Consideration MLTT Rate
Up-to and including $55,000 0.5%
Over $55,000 up-to $250,000 1.0%
Over $250,000 up-to $400,000 1.5%
Over $400,000 2.0%

 

Ontario land transfer tax rates

Effective January 1, 2017 Ontario land transfer rates paid depend on when the Agreement of Purchase and Sale was made.

1. For Agreement of Purchase and Sale made after November 14, 2016

When the Agreement of Purchase and Sale was made after November 14, 2016, and registration or disposition of the property occurs on or after January 1, 2017, for Canadian purchasers the tax is calculated at the following rates:

Value of Consideration Rate
Up-to and including $55,000 0.5%
Over $55,000 up-to $250,000 1.0%
Over $250,000 up-to $400,000 1.5%
Over $400,000 2.0%
Over $2,000,000* 2.5%

(*for land that contains at least one and not more than two single family residences)

For example, the total Ontario land transfer tax payable by the purchaser of a $100,000 property would be $725, while the land transfer tax on a $300,000 property is $2,975.

2. For Agreement of Purchase and Sale made on or before November 14, 2016, or the date of registration or disposition date is prior to January 2, 2017

In these circumstances, for Canadian purchasers, the tax is calculated at the following rates:

Value of Consideration Rate
Up-to and including $55,000 0.5%
Over $55,000 up- to $250,000 1.0%
Over $250,000 1.5%
Over $400,000* 2.0%

 

(*for land that contains at least one and not more than two single family residences)

When is land transfer tax paid?

Ontario’s land transfer tax must be paid at the time the transfer is registered.

If the transfer is not registered, buyers must complete a form called, Return on the Acquisition of a Beneficial Interest in Land, and submit it to the Ministry of Finance along with the payment of tax within 30 days of the purchase. This form is available at the Ministry.

 

Provincial land transfer tax rebate for first-time homebuyers

You may be eligible for a rebate of all, or part of the provincial land transfer taxes payable if you are a first-time homebuyer:

  • of a resale or newly constructed home, where the Agreement of Purchase and Sale was entered into after December 13, 2007
  • of a newly constructed homes, where the Agreement of Purchase and Sale was entered into before December 13, 2007

How much is the provincial rebate?

  • For conveyances and dispositions that occurred before January 1, 2017: a maximum provincial land transfer tax rebate of $2,000
  • For conveyances and dispositions that occur on or after January 1, 2017: a maximum provincial land transfer tax rebate of $4,000, regardless of when the Agreement of Purchase and Sale was made, and only on homes valued at greater than $368,000

Toronto land transfer tax rebate for first-time homebuyers

You may be eligible for a rebate of all of the Toronto municipal land transfer taxes (MLTT) payable if you are a first-time homebuyer of a resale residential property or newly constructed home.

  • For conveyances and dispositions that occurred prior to March 1, 2017 – a maximum Toronto land transfer tax rebate of $3,725 and you are a first-time buyer who:
    • is at least 18 years of age;
    • occupies the home as their principal residence no later than nine months after the date of the conveyance or disposition;
    • has not previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time; and
    • if the purchaser has a spouse, the spouse cannot have owned a home, nor had any ownership interest in a home, anywhere in the world while they were the purchaser’s spouse.

 

  • For conveyances and dispositions that occurred on or after March 1, 2017 – a maximum Toronto land transfer tax rebate of $4,475 and you are a first-time buyer who:
    • meets all of the above criteria;
    • is a Canadian citizen or permanent resident of Canada; and
    • if you become a Canadian citizen or permanent resident within 18 months of the transfer, you may apply for and may qualify for the rebate.

 

For more information about land transfer tax, speak with your lawyer or real estate agent, or visit the City of Toronto website at toronto.ca, or the Ministry of Finance.

If you are buying a home and want to know how much of a mortgage you qualify for, use the Scotiabank mortgage calculator .

Get help from a life insurance advisor

Understanding life insurance and what is best for you can be overwhelming. It is important to get professional advice for your unique situation, and it is more affordable than you think. Life insurance can protect your family, your home and your business.  For a free consultation and quote, contact an Empire Life Insurance advisor.

 


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