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.
However, 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. For example, when a property is transferred between spouses, or certain instances when a property is transferred into or out of an individual’s family business corporation.
Avoidance of Land Transfer Tax in Ontario
The Land Transfer Tax Act has been amended to include a general anti-avoidance rule. Avoiding Land Transfer Tax can result in strict consequences. However, there may be opportunities to reduce the amount payable. Strict caution should be followed and expert advice should be sought in this regard.