land transfer tax calculator ontario & toronto

First Time Home Buyer Land Transfer Tax Calculator Ontario & Toronto (2020)

Land Transfer Tax

There are many fees associated with buying a home in Canada: realtor fees, GST (for new home), movers, lawyer fees, home inspection, etc. Many first time buyer overlook the Land Transfer Tax. Land transfer tax applies to all real estate transactions in Canada except in the province of Alberta, Manitoba, and Nova Scotia.

What is the Land Transfer Tax?

The Land Transfer Tax (LTT), also known as Property Transfer Tax in BC, is a tax payable to the provincial government by buyers of real estate. In some provinces, the municipal government will levy land transfer tax as well. For example, Toronto has its own Land Transfer Tax as well.

Land transfer tax was introduced in most of the provinces in Canada during the 1970s. BC government introduced the land transfer tax in the 1980s. The transfer tax was a source of revenue for provincial governments and municipalities.

About Ontario Land Transfer Tax

When you buy a piece of land or acquire a beneficial interest in land, you pay land transfer tax to the Ontario provincial government when the transaction closes.

Land transfer tax in Ontario 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, the land transfer tax is based on the fair market value of the land, such as in the following examples:

  • the transfer of a lease with a remaining term that can exceed 50 years
  • the transfer of land from a corporation to one of its shareholders, or
  • the transfer of land to a corporation, if shares of the corporation are issued.

Land Transfer Tax (LTT) Rate in Ontario

Purchase Price of Home Ontario Land Transfer Tax Rate
First $55,000 0.5%
$55,000.01 to $250,000.00 1.0%
$250,000.01 to $400,000.00 1.5%
$400,000.01 to $2,000,000.00 2.0%
Over $2,000,000 2.5%

About Toronto Land Transfer Tax

In the late 2000s, the city of Toronto had budget deficit. Due to the provincial legislation, Toronto was prohibited from taxing income, fuel, or sales. However, the city was able to tax the followings: property, vehicle registration, road tolls, parking, and land transfer.

The city of Toronto introduced the Land transfer tax, also known as Municipal Land Transfer Tax (MLTT) in 2007, to help increase government revenue. It’s a tax on land and real estate sales within the city of Toronto. See below Toronto land transfer tax map to know if the home you want to buy incurs additional land transfer tax.

Boroughs that Toronto Land Transfer tax applies

Cities that Toronto Land Transfer tax does NOT apply

Toronto land transfer tax map

toronto land transfer tax map

Toronto Land Transfer Tax (MLTT) Rate

Purchase Price of Home Toronto Land Transfer Tax Rate
First $55,000 0.5%
$55,000.01 to $250,000.00 1.0%
$250,000.01 to $400,000.00 1.5%
$400,000.01 to $2,000,000.00 2.0%
Over $2,000,000 2.5%

Land Transfer Tax Exemptions

The total amount of land transfer tax can be huge for many first time home buyers. Often, the LTT can amount to betwen 1 to 3 per cent of the sales price. For example, if you are NOT a first time buyer looking to buy a $700,000 condo in Toronto, the total land transfer tax can amount to $20,950. This is tax represents an additional 3% increase on the home price. Thus, many provincial and municipal governments offer some sort of exemptions and rebates to qualified home buyers.

Ontario Land Transfer Tax Exemptions

The province of Ontario offers land transfer tax exemptions to qualified home buyers. Below are the exemptions available, but are not limited to:

  • certain types of transfers between spouses
  • certain types of transfers from an individual to his or her family business corporation
  • certain types of transfers of farmed land between family members
  • certain types of transfers of a lfe lease from a non-profit organization or a charity.

Click here for a full list of the Ontario land transfer tax exemptions.

Toronto Land Transfer Tax Exemptions

The city of Toronto offers municipal land transfer tax (MLTT) for qualified home buyers. For a purchaser to be exempted from the MLTT, the purchaser must be:

  • at least 18 years or older
  • occupy the home as their principal residence for at least 9 months after the date of the purchase
  • cannot have previously owned a home
  • if the buyer has a spouse, the spouse cannot have owned a home anywhere in the world while they were the buyer’s spouse
  • buyer is a Canadian citizen or permanent resident of Canada

If you have any other questions about the Land Transfer Tax, please feel free to contact me.

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