Canadian Financial Freedom






Ontario Land Transfer Tax

 

In Ontario, Land transfer tax is imposed on the acquisition of an interest in land by registered conveyance or unregistered disposition according to the Land Transfer Tax Act. Every person obtaining an interest in land is liable to land transfer tax. The tax is calculated on the value of the transfer. In certain circumstances the Land Transfer Tax Act (Act) deems the value of the consideration to be the fair market value of the land. Land also includes land with buildings, estates, options, leasehold interests and fixtures. It is always assessed when land is being transferred from one party to another. Each transaction must include a Land Transfer Tax Affidavit, which certifies that the tax has been paid. The tax is a percentage of the value of the property based on a graduated scale. The first $55k is tax at .5% (.005 X purchase price). The amount between $55k and $250k is taxed at 1% (.01Xpurchase price-275(for the 1st 55k amount). The amount between $250k and 400k for residential only is taxed at 1.5%, (1.5% in excess of 250k for commercial or industrial properties), .015 X purchase price - 1525 (for the 1st and 2nd amounts)). The amount of tax on the value over $400k is taxes at 2% for residential only, (.02X purchase price -3525(which is the maximum amount of tax on the 1st, 2nd, and 3rd amounts)).

Here is the formula in a table format


LAND TRANSFER TAX PAYABLE


Purchase Price

Land Transfer Tax Payable

$0 to $55,000

.005 x purchase price

$55,001 to $250,000

(.01 x purchase price) minus 275

$250,001 to $400,000 (residential)
$250,001 plus (business)

(.015 x purchase price) minus 1525

$400,001 plus (residential only)

(.02 x purchase price) minus 3525

Note that if the purchase price falls within this range, then apply the appropriate formula to the purchase price. For example on a $200,000 property, the LTT calculation would be [(.01 x $200,000) minus 275 = $1725].



For information about the refund of land transfer tax for first time buyers of new construction call the Ontario Finance Ministry at 1-800-263-7965 or access through www.gov.on.ca/FIN/english/bke-ltt.htm


FOR A LAND TRANSFER TAX CALCULATOR, CLICK ON LTT CALCULATOR