Land Transfer Tax

Home purchasers in most large Canadian centres have to add Land Transfer Taxes ("LTT") to their list of closing costs. Unless you live in Alberta, Saskatchewan, or rural Nova Scotia, Land Transfer Taxes (or property purchase taxes) are a basic fact of life.

Land Transfer Taxes, levied on properties changing hands, are the responsibility of the purchaser. Depending on where you live, the taxes can range from 0.5% to 2% of the total value of the property.

Many provinces have multi-tiered taxation systems and these can be complicated. If you purchase a property for $260,000 in Ontario, for example, 0.5% is charged on the first $55,000; 1% is charged on $55,000 to $250,000, and 1.5% is charged on $250,000 to $400,000.

In Ontario first time buyers of new homes may be eligible for a rebate of the Land Transfer Tax!

The following sections are designed to help you to calculate land transfer tax in Ontario. Please note: The calculations provided on this page and the Land Transfer Tax Calculator are provided for informational purposes only. I recommend that you consult with a professional in order to determine the actual amount of LTT you will be required to pay. (i.e. your agent, lawyer or banker).

To calculate the total Ontario Land Transfer Tax for the purchase of Residential properties in Ontario, add the following together:

• 0.5% on the first $55,000 of the purchase price
  
• 1.0% of the amount from $55,000 to $250,000
  
• 1.5% of the amount in excess of $250,001 to $400,000
  
• 2.0% of the amount in excess of $400,000
  

To calculate the total Ontario Land Transfer Tax for the purchase of Commercial properties in Ontario, add the following together:

• 0.5% on the first $55,000 of the purchase price
  
• 1.0% of the amount from $55,000 to $250,000
  
• 1.5% of the amount in excess of $250,000
  

The requirements in order to qualify for the refund of the land transfer tax for a first time purchaser's purchase of a newly constructed home are as follows:

• The purchaser must be at least 18 years old
• Application for refund must be made within 18 months after the date of conveyance or disposition
• The purchaser must occupy the home as his or her principle residence within 9 months of the date of conveyance or disposition
• The purchaser cannot have previously owned a home, or an interest in a home anywhere in the world
• A spouse or same-sex partner of the purchaser cannot have owned a home, or an interest in a home, anywhere while the spouse or same-sex partner of the first time purchaser
• The purchaser cannot have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of land transfer tax.

To apply for the refund, a Refund Affidavit should be presented to the Registrar and if properly completed, the refund amount will be deducted from the tax ordinarily payable.

For further information, please refer to Ontario Tax Bulletin LTT 4-2003 on the Ontario Minister of Revenue Website.