Land Transfer Tax (Ontario)

Land transfer tax rates in Ontario – Updated in 2013

The Ontario land transfer tax (LTT) is a marginal tax and each portion of your home’s value is taxed at a unique rate. These tax rates are as follows:

Purchase price of homeMarginal tax rateFirst-time home
buyer rebate
First $55,000 0.5% The Ontario first-time home buyer rebate 
covers the full land transfer tax up to a 
maximum of $2,000. It is only available 
to first time home buyers.
On $55,000 to $250,000 1.0%
On $250,001 to $400,000 1.5%
Over $400,001 2.0%

 

 

If you are purchasing a home in Toronto, it is important to note that an additional Toronto Land Transfer Tax will also apply. Beyond the land transfer tax you will also have to pay closing costs in Ontario when purchasing a home. These closing costs could include fees for an Ontario real estate lawyer and Ontario home inspector.

Ontario land transfer tax rebate in Ontario

For first time home buyers, there is a maximum $2,000 tax rebate on the Ontario land transfer tax. Based on Ontario’s land transfer tax rates, this rebate will cover the full tax for homes worth up to $227,500. For homes worth more than $227,500, buyers will only receive the full $2,000 rebate.

For Example:

Purchase price of homeLand transfer
tax
First-time home
buyer tax refund
Net tax
payable
$100,000 $725 $725 $0
$200,000 $1,725 $1,725 $0
$227,500 $2,000 $2,000 $0
$600,000 $8,475 $2,000 $6,475

 

First-time home buyer eligibility in Ontario

  • You must be 18 years or older.
  • You must occupy the home within 9 months of purchase.
  • You cannot have owned a home or interest in a home anywhere in the world.
  • Your spouse cannot have owned a home while being your spouse (but may be a previous home owner).
  • If the home is newly constructed, it must be eligible for home warranty.
  • Home buyers must apply for the refund within 18 months of purchase.

Application

Taxpayers can claim an immediate refund when registering the land transfer papers and paying their taxes. Tax rebate application forms are available online for home buyers registering electronically or on paper at government offices.

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. Information required for the application include:

  • 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.

Source: Ontario Ministry of Revenue, "Land Transfer Tax Refund for First-time Homebuyers"

Must Read: More Information on Land Transfer Taxes in Ontario and Toronto

Municipal Land Transfer Tax: City of Toronto
Provincial Land Transfer Tax: Ontario Government
Municipal Land Transfer Tax: Ontario Governemnt
Toronto Real Estate Board: Land Transfer Tax Overview

We encourage our users to educate themselves on this topic and its intricacies. We recommend that users speak to a government representative, a licensed Realtor and a real estate lawyer.

DISCLAIMER: andrewmccrea.ca and century21.ca/andrew.mccrea accepts no responsibility for any loss arising from any use or reliance on the information contained or produced through calculative function as described or found on pages linked to from this article.  

 SOURCE: ratehub.ca/land-transfer-tax

Andrew McCrea

Andrew McCrea

Sales Representative
CENTURY 21 United Realty Inc., Brokerage*
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