Land Transfer Tax Ontario

LAND TRANSFER TAX CALCULATOR ONTARIO

Purchasers of real estate in Ontario must pay a Land Transfer Tax, also known as LTT, when they are buying property. This tax is one of the most significant closing costs when buying real estate.

These taxes are levied on properties when they are purchased, and payment of the taxes is the sole responsibility of the buyer, not the seller. The amounts must be paid in full on the closing date.

The Land Transfer Tax is a provincial tax, but the City of Toronto has its own additional (municipal) Land Transfer Tax. In other words, if you are buying within the City of Toronto, you will pay two taxes, one to the province, and one to the city.

Locations in the GTA outside of Toronto proper, i.e. locations in the 905 area code, only pay the single provincial tax.

Calculate Ontario Land Transfer Tax

Use this online tool to quickly calculate the amount of tax payable.

Ontario Land Tax Transfer Calculator

Calculations of the tax are complicated. The amounts are based on a sliding scale, where more expensive properties have higher rates of tax to pay.

When calculating Land Transfer Tax in Ontario, this is the formula that is used. Tax professionals define this is having tax rates that are “marginal”.

That means the rate of the tax increases as the home’s value increases. The breakdown is as follows:

• 0.5% on the first $55,000
• 1.0% on the portion from $55,000.01 to $250,000
• 1.5% on the portion from $250,000.01 to $400,000
• 2.0% on the portion from $400,000.01 to $2,000,000
• 2.5% on any amount over $2,000,000

Toronto Land Transfer Tax

Home buyers in the City of Toronto have to pay an additional Municipal (Toronto) Land Transfer Tax:

• 0.5% on the first $55,000
• 1.0% on the portion from $55,000.01 to $250,000
• 1.5% on the portion from $250,000.01 to $400,000
• 2.0% on the portion from $400,000.01 to $2,000,000
• 2.5% on any amount over $2,000,000

As mentioned above, the Toronto tax is paid in addition to the provincial tax.

The amount of tax payable can be substantial, and it must be paid upfront, in full, on closing. For example, if someone purchases a $1,000,000 home in Ontario outside of the City of Toronto, the amount of tax due is $16,475.00. If the home is in the City of Toronto, the amount is $32, 950.00.

Does Every Type of Property Purchase Require Payment of the LTT?

• Virtually every type of property, including new and resale residential and commercial properties
• Houses, semi-detached, townhouses, condos, pre-construction condos, buildings, offices, vacant land

First Time Home Buyer Rebate

There is a land transfer tax rebate for first-time home buyers.

First time buyers can receive an instant rebate of up to $4,000 from the provincial tax, as well up to $4,475 from the Toronto tax, subject to certain conditions and eligibility rules. 

Land Transfer Tax Rebate for the Buyer

• The buyer must be a Canadian citizen or permanent resident of Canada
• The buyer must be older than 18 years
• The buyer must occupy the home within nine months of purchase
• The buyer cannot have owned a home previously anywhere in the world
• The buyer’s spouse cannot have owned a home while being your spouse

Restrictions on amount claimed

• If you’re buying with a spouse who is not a first-time buyer, you can apply for a partial rebate of 50%.
• If one spouse is first time home buyer and the other owned a home before, but not since becoming a spouse of the first time home buyer, then the spouse who is the first time home buyer can claim the whole rebate
• Investment properties do not qualify for the first time buyer rebate

How the Procedure Works

You sign, and your real estate lawyer processes an Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes form.

Land Transfer Tax Exemptions

Ontario provides exemptions for certain types of transactions. Here are some standard exemptions: 

• Certain transfers between spouses
• Transfers from an individual to their family business corporation
• Transfers of farmland between family members
• Transfers of a lease from a non-profit or charity

As with all matters concerning taxation, it’s mandatory that you consult with a real estate lawyer or accountant to determine all the facts.

Conclusion

We hope you find our page on calculating Land Transfer Tax in Ontario a useful guide.

For more information on these taxes and first time buyer rebates speak to your real estate lawyer. 

Related Info:

Real estate closing costs

HST on resale properties

HST on new and pre construction properties

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