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Ontario Land Transfer Tax: A Detailed Guide

When you acquire land in Ontario, either by Purchase or Benefit, tax may be payable to the province. We’ve compiled this useful guide to help you navigate this complicated topic.
Written By: Baron Alloway

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About Ontario Land Transfer Tax

When you purchase property, or acquire it through beneficial interest (such as through an estate), tax may be payable on the conveyance of that property to you. Generally, this tax is calculated based upon the purchase price of the land.

However, in some situations where a purchase price is not directly used, the market value of the land may be required to be obtained, and used for taxation purposes.

Not every transaction is subject to the same rates of tax. In scenarios where the purchaser is a non-resident, a speculation tax may apply. First time homebuyers and purchasers of new construction homes may also be eligible for certain rebates on the tax paid.

This resource is meant to be used as a general guideline only. Appropriate Legal council should be obtained to determine the exact amount of tax or refunds payable.

Who Pays Land Transfer Tax in Ontario?

Land Transfer Tax is paid by the Buyer of the property in Ontario. Generally, Land Transfer Tax is payable on all instances where property is conveyed from one individual (or corporation) to another.

There are some exemptions to land transfer tax in Ontario:

  • When a property is transferred between spouses
  • when a property is transferred into or out of an individual’s family business corporation.

Avoidance of Land Transfer Tax

A general anti-avoidance rule exists in the act. Avoiding Land Transfer Tax can result in strict consequences. However, there may be opportunities to reduce the amount payable. Seek expert advice in this manner.

Standard Land Transfer Tax Rates 2023

The following rates apply to all properties conveyed on or after January 1, 2017.

Looking for a simpler solution? Use our Land Transfer Tax Calculator

Similar to Income Tax, Land Transfer Tax rates are marginal tax rates. This means the respective rate is applied on the amount up to indicated. Tax is applied at the excess value up to the next bracket, and so on.

Purchase PriceTax Rate
Up to and Including $55,0000.5%
$55,000.01 – $250,0001%
$250,000.01 – $400,0001.5%
Above $400,0002%
Above $2,000,000 with 2 or less Single Family Units2.5%

Depending on the province you live in, you may be eligible for a rebate on a portion or all of the land transfer tax you pay when purchasing a home.

Ontario Land Transfer Tax Rebate

First time homebuyers in Ontario may qualify for a Land Transfer Tax rebate of up to $4,000. Based on the Ontario Land Transfer Tax rates, this could mean you are eligible for a full refund if the home you are purchasing is less than or equal to $368,333.

There are some stipulations that determine your eligibility:

  • Citizen of Canada or Canadian Permanent Resident
  • At least 18 years of age
  • Occupy the home personally within 9 months of its purchase
  • Never owned a home
  • Your spouse (if applicable) can never have owned a home as long as they have been your spouse.
  • In the event that your spouse does not qualify, you can still be eligible for up to 50% of the rebate

It is important to ensure that you apply for the rebate within 18 months of the transfer of property. ReaLawState’s expert team can assist you with determining your eligibility and help you with applying for the rebate. These services are all included in the commission you would normally pay. Contact Us today to have any of your questions answered.

Our LTT Calculator can assist with determining the total amount of Land Transfer Tax payable on your property. In addition to these, First Time Homebuyers may be eligible for other rebates.

Other Taxes

In addition to Ontario Land Transfer Tax, other taxes may be still payable. The following list provides some examples of taxes that may be payable in the transaction. It is best to consult legal council before purchasing to discuss which taxes may apply.

Non-Resident Speculation Tax

The Ontario Government has imposed a 15% non-resident speculation tax on property located within the Greater Golden Horseshoe Region by non-permanent residents and foreign corporations. More information regarding the Non-Resident Speculation Tax can be found on the Ministry of Finance Website.

The Greater Golden Horshoe Region as Illustrated by Statistics Canada

Those looking to purchase single family residences may be subject to the Foreign Buyer Ban enacted on January 1st, 2023. Non-residents may be ineligible to purchase property even if willing to pay the NRST.

Municipal Land Transfer Tax

Certain Municipalities may impose their own taxes on property conveyed within their limits. For example, the City of Toronto imposes a Toronto Land Transfer Tax. For more information, visit the City of Toronto Website.

Purchase PriceTax Rate
Up to $55,0000.5%
$55,000.01 – $250,0001%
$250,000.01 – $400,0001.5%
$400,000.01 – $2,000,0002%
Over $2,000,000 and More than 2 Single Family Units2%

Toronto Land Transfer Tax Rebate

In Addition to the Ontario Rebate, you may qualify for a rebate of the Toronto LTT, if such is applicable. For First time home buyers, the Toronto Land Transfer Tax Rebate is a maximum of $4,475. Given the current Land Transfer Tax Rates, this could mean you are eligible for a full rebate of Land Transfer Tax if the value of your home is less than or equal to $400,000.

The same stipulations apply to the Toronto Rebate, as with the Ontario Land Transfer Tax Rebate:

  • Citizen of Canada or Canadian Permanent Resident
  • At least 18 years of age
  • Occupy the home personally within 9 months of its purchase
  • Never owned a home
  • Your spouse (if applicable) can never have owned a home as long as they have been your spouse.
  • In the event that your spouse does not qualify, you can still be eligible for up to 50% of the rebate

Harmonized Sales Tax (HST)

Harmonized Sales Tax applies to the purchase of new construction homes. It may also apply to homes that have been deemed “Substantially Renovated”. If you’re a buyer of a new home in Ontario, you may be eligible to receive a rebate of the provincial portion of the HST (8%, up to $24,000). More information regarding eligibility of this rebate and details on application can be found on the Canada Revenue Agency website.

There are several government-funded programs to promote home ownership in Canada. We invite you to explore the list of these on our blog.

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