How to Calculate Land Transfer Tax

 

 

 

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

 

http://www.fin.gov.on.ca/en/bulletins/ltt/2_2005.html

Scott MacClure

Scott MacClure

Sales Representative
CENTURY 21 Miller Real Estate Ltd., Brokerage*
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