Land Transfer Tax Calculator
How is the land transfer tax calculated in Ontario?
In Ontario, land transfer tax is calculated as a percentage of the property’s sale value. The percentage changes based on how much the property was sold for. For example, for a property sold for $55,000 or less, the land transfer tax would be 0.5%.
However, for a property sold for between $55,000 and $250,000, the land transfer tax would be 1%. The land transfer tax is also higher for properties that contain more than one single-family residence. For properties sold for over $400,001 that have one or two single-family residences, the land transfer tax would be 2.5%.
Therefore, it is important to consider the land transfer tax when buying property in Ontario.
Who pays land transfer tax in Ontario?
In Ontario, land transfer tax is paid by the buyer when they purchase a property. The lawyer arranging the sale will take care of land transfer taxes as part of the transfer of the deed into the new owner’s name (on closing day).
Sellers never pay land transfer tax in Ontario. This is just one more cost that buyers need to be aware of when budgeting for their new home. Although it may seem like another expense to add to an already long list, keep in mind that land transfer tax is a one-time fee. Once you’ve paid it, you won’t have to worry about it again.
Who is exempt from paying land transfer tax in Ontario?
When land is transferred between affiliated corporations in Ontario, no land transfer tax is payable. There are also exemptions for certain transfers between spouses, as well as for certain easements granted to oil or gas pipelines.
In addition, the land transfer tax does not apply to certain conveyances of family farms or family business corporations. Other exemptions include disposition of land by an employee to employer, certain life lease interests, hospital restructuring, charity reorganizations, and certain transfers under the Municipal Water and Sewage Transfer Act.
Finally, certain acquisitions under the Toronto Islands Residential Community Stewardship Act, 1993 are also exempt from the land transfer tax. If you are unsure whether or not your transaction falls under one of these exemption categories, you should consult with a qualified lawyer or accountant. Source
Does first-time home buyers pay a land transfer tax in Ontario?
In Ontario, land transfer tax is payable by all home buyers, regardless of whether it’s their first home or not. However, first-time home buyers may be eligible for a partial or full refund of land transfer tax.
To qualify, you must be at least 18 years old and you (or your spouse) cannot have owned a home anywhere in the world. You also cannot have previously owned a house in Ontario. If you meet all the criteria, you can claim your refund by submitting the proper documentation to the Ontario Land Registry Office.
The process is relatively simple and straightforward, so don’t hesitate to take advantage of this generous program if you’re eligible. Source
