In general, if you buy land or an interest in land in Ontario, you must pay Ontario's land transfer tax, whether or not the transfer is registered at one of Ontario's land registry offices.
Land includes any buildings, buildings to be constructed, and fixtures (such as light fixtures, built-in appliances and cabinetry).
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:
- a lease can exceed 50 years;
- land is transferred from a corporation to one of its shareholders; or
- land is transferred to a corporation, if shares of the corporation are issued.
HOW MUCH DO I PAY?
The tax rate has not changed since June 1, 1989.
- 0.5% of the value of consideration for the transfer up to and including $55,000,
- 1% of the value of the consideration which exceeds $55,000 up to and including $250,000,
- 1.5% of the value of the consideration which exceeds $250,000, and
- 2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.
As of December 13, 2007 the Ontario Government introduced a Land Transfer Tax rebate for all first time home buyers; for new or resale homes. Prior to December 13, 2007, this rebate applied to new construction only.
First-time homebuyers may be eligible for a refund of all or part of the tax.
Applications for a refund must be made within 18 months after the date of the transfer.
Click here to calculate your land transfer tax!
WHEN DO I PAY THE LAND TRANSFER TAX?You must pay Ontario's land transfer tax at the time the transfer is registered.
If the transfer is not registered, you must submit a Return on the Acquisition of a Beneficial Interest in Land to the Ministry of Revenue along with payment of tax within 30 days.
Exemptions from land transfer tax are limited. The main exemptions include:
- certain transfers from an individual to their family business corporation;
- certain transfers of farmed land between family members;
- certain transfers between spouses;
- certain transfers of a life lease from a non-profit organization or a charity.
A deferral of land transfer tax may be available when land is transferred between affiliated corporations, and notice of the transfer is not registered in a land registry office.
For more information about exemptions and deferral of land transfer tax, refer to this list of land transfer tax bulletins.
Information courtesy of the Ontario Ministry of Revenue.
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