In late 2007 the City of Toronto enacted their own Land Transfer Tax. For closings Feb 1, 2008 and later, for any real estate purchased within the Toronto city boundaries, there is now a second tax to pay, in addition to the existing Provincial Land Transfer Tax! This new double tax only applies within the city of Toronto. Homebuyers who purchase a house in area code 905 only pay the single, provincial tax.

The formula for calculating the new City of Toronto Land Transfer Tax is as follows:

• for a purchase price up to $55,000: multiply price x 0.5% *

• for a purchase price from $55,001 to $400,000: multiply price x 1.0% and deduct $275

• for a purchase price over $400,000: multiply price x 2.0% and deduct $4275.00

*this new tax can apply to the sale of a condominium locker or parking space, for example

First time buyers have an exemption, if the residential property they are purchasing is less than $400,000.

Different rules and rates apply for non-residential properties, i..e commercial properties. With new home construction, rates are calculated net of HST.