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WHAT IS LAND TRANSFER TAX?
In Ontario, land transfer tax is payable on every registered transfer of title unless the transfer falls under an exemption. Land transfer tax (LTT) is payable to the province of Ontario and may be payable to the municipality. As of the date of this article, the only municipality that charges a land transfer tax is the City of Toronto. It is important to note the rate for commercial and residential land transfer tax differ. See Figure 1. for the Ontario residential LTT rates and Figure 2. For the Ontario commercial LTT rates.
First-time home buyers may be eligible for a provincial or municipal rebate on the land transfer tax. In Ontario, the maximum land transfer tax rebate is $4,000.00, while the maximum municipal land transfer tax rebate in Toronto for residential properties is $4,475.00 after March 1st, 2017. Below you will find more information on LTT.
Figure 1.
| Ontario Residential Land Transfer Tax Rate | |
| Purchase Price of the Home | Tax Rate |
| $0.00 – 55,000.00 | 0.5% |
| $55,000.01 – $250,000.00 | 1.0% |
| $250,000.01 – $400,000.00 | 1.5% |
| $400,000.01 – $2,000,000.00 | 2.0% |
| $2,000,000.01+ | 2.5% |
Figure 2.
| Ontario Commercial Land Transfer Tax Rate | |
| Purchase Price of the Home | Tax Rate |
| $0.00 – 55,000.00 | 0.5% |
| $55,000.01 – $250,000.00 | 1.0% |
| $250,000.01+ | 1.5% |
Certain registered transfers may be exempt from land transfer tax. Current examples of situations where a transfer is exempt from land transfer tax include but is not limited to:
- Transfers being carried out in accordance with the terms of a separation agreement where the parties have agreed to live separate and apart;
- Transfers of property between spouses for natural love and affection;
- Transfers of a conveyance of land between an individual to his family business; and
- Transfers between trustees and beneficiaries.
It is important to adhere to the specific guidelines of the Ministry of Finance to ensure you qualify for one of the exemptions for the land transfer tax.
Contact us today if you require legal assistance with a real estate transaction. Our real estate law team has the experience and knowledge to assist you throughout every step of the transaction.
Disclaimer: The information contained in this article is not to be construed as legal advice. The content is drafted and published only for the purpose of providing the public with general information regarding various real estate and business law topics. For legal advice, please contact us.
About the Author:
Shahriar Jahanshahi is the founder and principal lawyer at Jahanshahi Law Firm with a practice focus on representing business star-ups and investors in the province of Ontario. For further information about Shahriar Jahanshahi, click here.
