Calculating land transfer tax

Calculating Land Transfer Tax

Bulletin LTT 2-2005 Published: September 2005 Content last reviewed: September 2009 ISBN: 0-7794-8518-1 (Print), 0-7794-8520-3 (PDF), 0-7794-8519-X (HTML)

  • This bulletin provides general guidelines on the calculation of land transfer tax payable on every conveyance and disposition of land in Ontario.  
  • This bulletin replaces Land Transfer Tax Information Bulletin 1-89. 
  • The information in this bulletin does not replace the law found in the Land Transfer Tax Act ("Act") and related regulations.

General

Introduction

Land transfer tax is payable on every conveyance of land tendered for registration and every unregistered disposition of a beneficial interest in land, unless specifically exempt under the Act or regulations.

The definition of "land" as defined in subsection 1(1) of the Act is broad and includes lands, buildings, structures, structures to be constructed, fixtures and any interest in these.

Land transfer tax is calculated on the "value of the consideration" as defined in subsection 1(1) of the Act.  It includes the purchase price, liabilities assumed, benefits conferred, soft costs and the cost of upgrades.  In some instances, the value of the consideration is deemed to be the fair market value of the land, for example, leases over fifty years and transfers between corporations and shareholders. 

For the definitions of "value of the consideration" and "land," please see the end of this bulletin or the Act.

Tax Rates

The tax rates on the value of the consideration are as follows:

Amounts up to and including $55,000 -0.5 %

Amounts exceeding $55,000 up to and including $250,000 - 1.0 %

Amounts exceeding $250,000 - 1.5 %

Amounts exceeding $400,000 where the land contains one or two single family residences - 2.0 %

For the definition of "single family residence," as defined in subsection 1(1) of the Act please see the end of this bulletin or the Act.

Calculation Examples

Example #1

Value of the consideration equals $95,000.

  1. Multiply $55,000 by 0.5% (55,000 × 0.005) = $275 
  2. Multiply the amount exceeding $55,000 up to $250,000 by 1.0% (40,000 × 0.01) = $400 Total land transfer tax payable = $ 675

Example #2

Value of the consideration equals $450,000 for land not containing one or two single family residences.

  1. Multiply $55,000 by 0.5% (55,000 × 0.005) = $275 
  2. Multiply the amount exceeding $55,000 up to $250,000 by 1.0% (195,000 × 0.01) = $1,950 
  3. Multiply the amount exceeding $250,000 by 1.5% (200,000 × 0.015)= $3,000

Total land transfer tax payable = $5,225

Example #3

Value of the consideration equals $450,000 for land containing one or two single family residences.

  1. Multiply $55,000 by 0.5% (55,000 × 0.005) = $275 
  2. Multiply the amount exceeding $55,000 up to $250,000 by 1.0% (195,000 × 0.01) = $1,950 
  3. Multiply the amount exceeding $250,000 up to $400,000 by 1.5% (150,000 × 0.015) = $2,250 
  4. Multiply the amount exceeding $400,000 by 2.0% (50,000 × 0.02)= $1,000

Total land transfer tax payable = $5,475

Quick Calculation Formula

Formula for Quick Calculation of Land Transfer Tax

For a quick calculation of land transfer tax, refer to the following table.  Residential property refers to land containing one or two single family residences as defined by the Act.  "Value of the Consideration" for a conveyance or disposition is shown as  "VC."  Land transfer tax payable is shown as "LTT."

For the Value of the Consideration:

  • Up to and including $55,000 = VC × 0.005 
  • Exceeding $55,000 and up to $250,000 = (VC × 0.01) - $275 
  • Exceeding $250,000, for property other than residential = (VC × 0.015) - $1525 
  • Exceeding $250,000 up to $400,000, for residential property = (VC × 0.015) - $1525 
  • For residential property exceeding $400,000 = (VC × 0.02) - $3525
Carole Hunnisett

Carole Hunnisett

Sales Representative
CENTURY 21 Blue Sky Region Realty Inc., Brokerage*
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