What is the Land Transfer Tax Ontario?
When you buy land or an interest in land in Ontario, you pay Ontario’s land transfer tax. Land includes any buildings, buildings to be constructed, and fixtures (such as light fixtures, built-in appliances and cabinetry).
Who pays land transfer tax?
When you acquire a property or land, you pay land transfer tax to the province when the transaction closes.
Land transfer tax is normally based on the amount paid for the land, in addition to the amount remaining on any mortgage or debt assumed as part of the arrangement to buy the land.
In some cases, land transfer tax is based on the fair market value of the land, for example, where:
- the transfer of a lease with a remaining term that can exceed 50 years
- the transfer of land is from a corporation to one of its shareholders, or
- the transfer of land is to a corporation, if shares of the corporation are issued.
If the property you purchase is in the City of Toronto you will be required to pay both the Municipal and Provincial land transfer taxes. Outside of the GTA you will only be required to pay the Provincial Land Transfer Tax.
Calculating the Provincial Land Transfer Tax (PLTT)
Up to $55,000 X 0.5% of total property value or $275.00
From $55,000 to $250,000 X 1% of total property value or $1,950.00
From $250,000 to $400,000 X 1.5% of total property value(On a $300,000 home purchase the tax would be $750.00 – A total tax of $275 + $1,950 + $750 = $2,975)
From $400,000 up X 2% of total property value
The City of Toronto levies an additional LTT on Toronto real estate in addition to the provincial rate.
Land Transfer Tax Rebates: First Time Home Buyers
If you are a first time home buyer you are eligible for rebates for both the Municipal (Toronto Only) and Provincial Land Transfer Tax
Provincial Land Transfer Tax (PLTT): Maximum $2000 Rebate
Municipal Land Transfer Tax (MLTT): Maximum $3725 (Toronto Only)
Land Transfer Tax Refund for First-time Homebuyers
When you buy land or an interest in land in Ontario, you pay land transfer tax. First-time homebuyers of an eligible home may be eligible for a refund of all or part of the tax.
How much money could I receive?
The maximum amount of the refund is $2,000.
Cost of Home Tax Payable Tax Refund Net Tax Payable
$100,000 $725 $725 $0
$200,000 $1,725 $1,725 $0
$300,000 $2,975 $2,000 $975
If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Finance, within 18 months after the transfer. No interest is paid on this refund.
Do I qualify?
To get a refund of land transfer tax, you:
- must be at least 18 years old
- must occupy the home as your principal residence within nine months of the date of transfer
- cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, and
- if you entered into an agreement of purchase and sale before December 14, 2007, the eligible home must be newly constructed and you must be eligible for the Tarion New Home Warranty.
- If you have a spouse, your spouse cannot have owned an eligible home, or an interest in an eligible home, anywhere in the world while being your spouse.
You must apply for a refund within 18 months after the date of the transfer.
How do I get the refund?
If you qualify, you can claim an immediate refund at time of registration in one of two ways:
If registering electronically, complete the required statements under the “explanation” tab of the land transfer tax statements. Normally your lawyer will assist you with this.
If registering on paper, file an Ontario Land Transfer Tax Refund Affidavit For First-time Purchasers of Eligible Homes at the Land Registry Office.