Land Transfer Tax

When you buy land, or an interest in land then that purchase is liable for Land Transfer Tax.  The amount owing is dependent on the value of the property and for most purchases  (ie. land with a single family dwelling on it) is calculated according to:

0.5% on the first $55,000

1% from $55,000-250,000

1.5% from $250,000-$400,000

2% above $400,000.

So if the home you buy is priced at $450,000

The land transfer tax will be: $275+1950+2250+1000 = $5475*

If you are purchasing a home in Toronto then there is an additional Toronto Land Transfer Tax.  The rates for this tax, for a single family home, are calculated according to:

0.5% on the first $55,000

1% from $55,000-400,000

2% over $400,000

The Municipal Land Transfer Tax on the $450,000 single family home example would be:

$275+3450+1000 = $4725*

First Time home buyers are eligible for a rebate against both the Provincial and Municipal Land Transfer Tax, provided they meet the following criteria:

  • The purchaser is at least 18 years of age.
  • The purchaser must occupy the home as his/her principal residence no later than nine months after the date of the conveyance or disposition.
  • The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
  • 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 he/she was the purchaser’s spouse. If this is not the case, no rebate is available to either spouse.

The limit of the rebate for the Provincial Land Transfer Tax is $2000, and for the Municipal one it’s $3725.

The rebate can be claimed at the time of registering the sale and transferring title – ask your lawyer about this.  If you didn’t claim your rebate on closing and are eligible then details of how to claim along with more information on Land Transfer Tax can be found here.

Provincial Land Transfer Tax

Municipal Land Transfer Tax

Other municipalities are considering following Toronto’s example and introducing their own Municipal Land Transfer Tax as a means of increasing revenue.

*These examples are for purchases of single family homes, calculations may be different for other types of property.

 

 

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