What Are Land Transfer Taxes and How Does It Work?

Let’s Begin.

In Ontario, land transfer tax (LTT) is a fee paid to the government when real estate is purchased, with the amount based on the purchase price and location.

Toronto Land Transfer Tax

• Double Tax: Toronto buyers pay both a municipal LTT (imposed by the City of Toronto) and a provincial LTT.

Rest of Ontario Land Transfer Tax (Outside of Toronto)

• Single Tax: Buyers only pay the provincial LTT.

Rebates for First-Time Homebuyers:

Eligible first-time buyers in Toronto can receive a rebate of up to $4,475 on municipal LTT and $4,000 on provincial LTT, while buyers outside of Toronto can receive a provincial rebate of up to $4,000.

Calculation for Toronto.

$0 - $55K: 0.5% of the purchase price (municipal) + 0.5% (provincial)

$55K - $250K: 1% municipal + 1% provincial

$250K - $400K: 1.5% municipal + 1.5% provincial

$400K - $2M: 2% municipal + 2% provincial

$2M - $3M: 2.5% municipal + 2.5% provincial

$3M - $4M: 3.5% municipal + 2.5% provincial

$4M-$5M: 4.5% municipal + 2.5% provincial

$5M - $10M: 5.5% municipal + 2.5% provincial

Calculation for the Rest of Ontario.

$0 - $55K: 0.5% of the purchase price

$55K - $250K: 1%

$250K - $400K: 1.5%

$400K - $2M: 2%

$2M+: 2.5%

In Conclusion.

Land transfer taxes can vary based on factors like location, property type, and buyer status. A useful resource for calculating land transfer taxes can be found here:

https://www.ratehub.ca/land-transfer-tax

With proper planning and working with a knowledgeable and experienced realtor, you too can make a well-informed decision when purchasing your next property.