Land Transfer Tax
When you buy land, home, or an interest in land in Ontario, you must pay Ontario's land transfer tax, whether or not the transfer is registered at one of Ontario's land registry office. You pay the Ontario's land transfer tax at the time the transfer is registered. The land transfer tax is part of your closing cost.
How to Calculate Land Transfer Tax in Ontario
| Purchase Price | Marginal Tax Rate |
|---|---|
| First $55,000 | 0.5% |
| On $55,000 to $250,000 | 1.0% |
| On $250,000 to $400,000 | 1.5% |
| Over $400,000 | 2.0% |
Source: Ontario Ministry of Revenue, "Land Transfer Tax."
Qualifying first time home buyers in Ontario receive a land transfer tax rebate. The rebate will cover the fully taxed amount on houses up to $227,500. For houses over $227,500, homebuyers will receive the maximum $2,000 rebate. To obtain this refund, you need to apply within 18 months after the purchase of the home.
Eligibility for the rebate
- The buyer must be older than 18 years
- The buyer must occupy the home within nine months of purchase
- The buyer cannot have owned a home anywhere in the world
- The buyer's spouse cannot have owned a home while being your spouse
- If you are purchasing a new home, it must be eligible for home warranty
Toronto Land Transfer Tax
As a taxation measure granted under the City of Toronto Act,2006, Toronto City Council approved a new Municipal Land Transfer Tax effective February 1, 2008 that will be applied to purchases on all properties in the city of Toronto in addition to the Ontario's Land Transfer Tax.
How to Calculate Land Transfer Tax in Toronto
| Purchase Price | Marginal Tax Rate |
|---|---|
| First $55,000 | 0.5% |
| On $55,000 to $400,000 | 1.0% |
| Over $400,000 | 2.0% |
Source: Ontario Ministry of Revenue, "Land Transfer Tax."
Qualifying first time home buyers in Toronto are exempt on the first $400,000. In addition to the land transfer tax, home buyers in Toronto are also subject to a City of Toronto tax.
