Land Transfer Tax in Ontario

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Land Transfer Tax is a Provincial tax paid by purchasers when acquiring Real Estate.  The tax is paid on the closing date as part of the purchase and sale process with your Lawyer.   The Tax is based on the purchase price of the home.  Additionally, first time home Buyers are eligible for a rebate of the Land Transfer Tax as part of an incentive to help young people with home ownership.

 

Ontario Land Transfer Tax is calculated as follows:

0.5% up to and including $55,000 plus

1% above $55,000 up to and including $250,000 plus

1.5% above $250,000 plus

2% above $400,000 where the land contains one or two single family residences

Currently in Ottawa, the average sale price of a single family residential home is $380,075.00.  For an Ottawa resident who is not a first time Buyer, this would result is a provincial Land Transfer Tax of $4,176.00.  First time home Buyers receive a rebate of up to $2,000 so a first timer purchasing this same home at the average Ottawa sale price of $380,075.00 would pay $2,176.00 in land transfer tax.  Based on these same calculations First time Home Buyer purchasing a home at less than $225,000 would not pay any land transfer tax at all.  

Currently, in Toronto it’s a different story.  While residents purchasing homes within the City pay the same provincial Land Transfer Tax as the rest of us in Ontario, they also pay a Municipal Land Transfer Tax which was introduced in 2008.  The municipal land transfer tax is calculated as follows:  

0.5% up to and including $55,000 plus

1% above $55,000.01 to $400,000.00 plus

2% above $400,000.00

This additional municipal tax can effectively double what the rest of Ontarians are paying.  Using the Ottawa example of an average sale price for single family home of $380,075.00 and purchased by a non first time buyer would result in Ontario Land Transfer of $4,176.00 plus a Municipal Land Transfer tax of $3,525.75  

Bet you’re glad you don’t live in Toronto right now!

The reality is there is a possibility that this second Land Transfer Tax, like Toronto’s could come to the Ottawa market should the Ontario Government allow the municipalities to introduce it.  

The threat has been on the horizon for some time and the Ontario Real Estate Association wants to do something about it.  

Info on how to stop a Municipal Land Transfer Tax can be found here

For more information on the purchase and sale process, check out our Buyers page here

Have a great weekend!