Land Transfer Tax FAQs Updated

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What is the definition of a First Time Homebuyer

In order to qualify for the instant first time homebuyer rebates for the Ontario/Toronto Land Transfer Tax the following must apply:

The purchaser must be at least 18 years of age.

Application for the refund must be made within 18 months after the date of the conveyance or disposition. Parnes Rothman LLP Real Estate Lawyers will get you an instant rebate.
The purchaser must occupy the home as his or her principal residence within 9 months of the date of closing.
The purchaser cannot have owned a home or had any ownership interest in a home, anywhere in the world.
A spouse of the purchaser cannot have owned a home or had any ownership interest in a home, anywhere in the world while he or she was the purchaser’s spouse.

What if my spouse owns a property? Am I still a first time homebuyer?

If your spouse owns a property AFTER you were married then you are NOT a first time homebuyer because you have an interest in your spouse's property.

If your spouse sold the property BEFORE you were married then you ARE a first time homebuyer but your spouse is not. You would qualify for 50% of the rebate if both you and your spouse were on title. If you take the property in your own name then you would qualify for 100% of the rebate.

Does Land Transfer Tax apply for a transfer of title between husband & wife?

There is NO Land Transfer Tax payable if there is a transfer of ownership/title between spouses or common law partners who have been together for more than 3 years.

Does Land Transfer Tax apply for a transfer between parent & child?

Land Transfer Tax IS applicable if there is a transfer of ownership/title between parent and child. If the child is receiving the property as a gift then Land Transfer Tax is based on the amount of the outstanding balance of the mortgages/Lines of Credit. IE: if the property is a gift and there is a balance of $200,000 on the mortgage then land transfer tax is based on $200,000 (if the property is located in Toronto then Toronto Land Transfer Tax is also applicable. If the child is being added to title then Land Transfer Tax is based on the proportionate share of the property. IE: if the child will be receiving a 50% interest in the property then they will be responsible for 50% of the Land Transfer Tax based on $100,000 NOT $200,000.

When is Toronto Land Transfer Tax applicable?

The Toronto Land Transfer Tax applies when you purchase a home within the city limits of Toronto, Ontario. You should also note that Ontario Land Transfer Tax is also applicable.

How is the Land Transfer Tax Paid

The purchaser's solicitor pays the Land Transfer Tax on behalf of the purchaser on the closing date. The purchaser will be required to provide their solicitor closing funds (certified) that will cover the closing expenses. Visit our "Get a FREE Price Quote Now" Closing Cost Quotation System.

How is the Land Transfer Tax Calculated?

The tax is calculated on the value of the consideration for the transfer. In certain circumstances the Land Transfer Act (Act) deems the value of the consideration to be the fair market value of the land.

On transfers of residential real property in Ontario, Land Transfer Tax (LTT) is calculated on the purchase price (less a HST calculation, if the property purchased is a newly built home). The LTT is payable by the purchaser on the purchase price upon registration of a Transfer/Deed of Land in the Ontario Land Registry Office on closing based on the following upward sliding scale:

0.5% on the first $55,000 of the purchase price, plus;
1.0% on the amount exceeding $55,000 up to and including $250,000, plus;
1.5% on the amount exceeding $250,000 up to and including $400,000, plus;
2.0% on the amount over $400,000
(Please note: non-residential properties, such as industrial or commercial real estate, there is no 2% charge since the tax rate is 1.5% for any amount of purchase price over $250,000 regardless of the total price).

How is the Toronto Land Transfer Tax Calculated?

The tax is calculated on the value of the consideration for the transfer. The LTT is payable by the purchaser on the purchase price upon registration of a Transfer/Deed of Land in the Ontario Land Registry Office on closing based on the following upward sliding scale:

0.5% on the first $55,000 of the purchase price, plus;
1.0% on the amount exceeding $55,000 up to and including $400,000, plus;
2.0% on the amount over $400,000

How is Ontario Land Transfer Tax Calculated for new homes?

If you are buying new from the builder, the Ontario Land Transfer Tax is calculated on a price which is net of the HST and therefore the Ontario Land Transfer Tax will be slightly less for a new home than for a resale home with the same purchase price.

How is Toronto Land Transfer Tax Calculated for new homes?

If you are buying new from the builder in the city of Toronto, the Toronto Land Transfer Tax is calculated on a price which is net of the HST and therefore the Toronto Land Transfer Tax will be slightly less for a new home than for a resale home with the same price.

How much is the First Time Homebuyer rebate worth?

BUYING IN ONTARIO: If you are a first time homebuyer you will qualify for up to $2,000.00 rebate in Ontario. IE: if your Ontario Land Transfer Tax is $2,500.00 then you would qualify for the full $2,000.00 rebate and only pay $500.00. If the Land Transfer Tax applicable was $1,800.00 you would qualify for a $1,800.00 rebate and you would pay $0.00.

BUYING IN TORONTO: If you are a first time homebuyer you will qualify for up to $3,750.00 rebate in Toronto. IE: if your Toronto Land Transfer Tax is $2,500.00 then you would qualify for the full $2,500.00 rebate and only pay $0.00. If the Land Transfer Tax applicable was $4,750.00 you would qualify for a $3,750.00 rebate and you would pay $1,000.00.

Who pays the land transfer tax?

Only the buyer is responsible for paying the Land Transfer Tax. The Seller does not pay Land Transfer Tax.