Land Transfer Tax
When you buy land, a home, 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 office. You pay the Ontario's land transfer tax at the time the transfer is registered. The land transfer tax is part of your closing cost.
Land transfer tax rates in Toronto
The cost of your land transfer tax (LTT) is a percentage of your home’s value, estimated using the property’s purchase price. Note that the LTT is not just a simple average tax of your home’s value. Instead, the LTT is a marginal tax and each portion of your house’s value is taxed at its own marginal tax rate. Homebuyers in Toronto must pay both the provincial land transfer tax and municipal land transfer tax, as outlined below.
The Toronto Land Transfer tax is charged on all home purchases within the boundaries of Toronto. This is defined as south of Steeles Avenue, east of Etobicoke, west of Scarborough, and north of Lake Ontario.
For property containing at least one, and not more than two, single family residences with a consideration value of:
| Value of Consideration | Rate |
|---|---|
| Up to and including $55,000.00 | 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 $2,000,000.00 | 2.5% |
For all other non-single family residences with a consideration value of:
| Value of Consideration | Rate |
|---|---|
| Up to and including $55,000.00 | 0.5% |
| $55,000.01 to $250,000.00 | 1.0% |
| $250,000.01 to $400,000.00 | 1.5% |
| Over $400,000.00 | 2.0% |
Land transfer tax rebates in Toronto
For first-time homebuyers in Toronto, there is also a maximum $4,475 tax rebate on the municipal LTT. Based on Toronto’s tax rate, the rebate will cover the full Toronto LTT on homes worth $400,000 or less. The Toronto LTT rebate is calculated similarly to that of Ontario’s.
Eligibility for Toronto land transfer tax rebate
- You must be a Canadian citizen or permanent resident of Canada.
- You must be 18 years or older.
- You must occupy the home within 9 months of purchase.
- Your spouse cannot have owned a home while being your spouse (but maybe a previous homeowner).
- If the home is newly constructed, it must be eligible for home warranty.
- Homebuyers must apply for a refund within 18 months of purchase.
Ontario land transfer tax rates
It's important to remember that the Toronto land transfer tax is levied in addition to the Ontario Land Transfer Tax. This means you'll be required to pay two different land transfers taxes. Here are the current Ontario land transfer tax rates:
| Purchase price of home | Land title transfer fee | First-time homebuyer rebate |
|---|---|---|
| Up to and including $55,000 | 0.5% | Full tax rebate |
| $55,000.01 to $250,000.00 | 1.0% | Full tax rebate |
| $250,000.01 to $368,333 | 1.5% | Full tax rebate |
| $368,334 to $400,000.00 | 1.5% | $4,000 tax rebate |
| $400,000.00 to $2,000,000.00 | 2.0% | $4,000 tax rebate |
| Over $2,000,000.00 | 2.5% | $4,000 tax rebate |
Land transfer tax refund in Ontario
For first-time homebuyers, there is a maximum $4,000 tax refund on the Ontario land transfer tax. Based on Ontario’s land transfer tax rates, this refund will cover the full tax for homes up to $368,333. For homes purchased for more than $368,333, buyers will receive the full $4,000 rebate and pay the remaining LTT balance.
| Purchase price of home | Tax Payable | Tax Refund | Net Tax Payable |
|---|---|---|---|
| $100,000 | $725 | $725 | $0 |
| $200,000 | $1,725 | $1,725 | $0 |
| $400,000 | $4,475 | $4,000 | $475 |
Eligibility for Ontario land transfer tax refund
- You must be a Canadian citizen or permanent resident of Canada.
- You must be 18 years or older.
- You must occupy the home within 9 months of purchase.
- Your spouse cannot have owned a home while being your spouse (but may be a previous homeowner).
- If the home is newly constructed, it must be eligible for home warranty.
- Homebuyers must apply for the refund within 18 months of purchase.
Application
Taxpayers can claim an immediate refund when registering the land transfer and paying the tax. Forms are available for homebuyers registering electronically or on paper.
If the rebate is not claimed at the time of registration, the full tax is paid and a refund claim can be made to the Ministry of Finance within 18 months. The application information required includes:
- A completed Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes.
- A copy of the registered land transfer deed.
- A copy of the Agreement of Purchase and Sale.
- A copy of a document that provides proof of residence, such as a driver’s license, telephone/cable bills, etc.