Buying a Home: Land Transfer Tax
The last thing you want when buying a home is a surprise expense. If you aren’t expecting it, land transfer tax (LTT) can be a big shock when it comes time to run the numbers.
Who pays Land Transfer Tax?
In Ontario, the buyer pays LTT when they purchase a property (homes and condos). Sellers do not pay. Your solicitor will arrange for land transfer taxes to be paid when the deed to the new home is transferred in your name on closing day. Buyers in Toronto have to pay the Toronto LTT and the Ontario LTT, both. First-time homebuyers may be eligible for a refund of all or part of the tax. (Click here for details of the Land Transfer Tax Refund Program.)
How much is land transfer tax in Toronto and Ontario?
Toronto and Ontario land transfer taxes are based on a sliding scale.
Ontario Land Transfer Tax:
- 0.5% of the value of the property up to and including $55,000
- 1% of the value which exceeds $55,000 up to and including $250,000
- 1.5% of the value which exceeds $250,000 up to and including $400,000
- 2% of the value between $400,000 and $2,000,000
- 2.5% for amounts exceeding $2,000,000, where the land contains one or two single family residences
Toronto Land Transfer Tax:
- 0.5% up to and including the first $55,000
- 1% of the value which exceeds $55,000 up to and including $250,000
- 1.5% of the value between $250,000 and $400,000
- 2% of the value between $400,000 and $2,000,000
- 2.5% of the value over $2,000,000
It’s confusing, for sure. And it can be costly if you haven’t budgeted for it. If you have questions on what LTT might be when you buy, and what the rebate options are, call me. I can help.
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