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Who pays land transfer tax?

When you acquire land or a beneficial interest in land, you pay land transfer tax to the province when the transaction closes. Your lawyer will usually collect this tax and pay it directly to the goverment. 

Land transfer tax is normally based on the amount paid for the land, in addition to the amount remaining on any mortgage or debt assumed as part of the arrangement to buy the land. To calculate land trasfer tax click here

In some cases, land transfer tax is based on the fair market value of the land, such as in the following examples:

  • the transfer of a lease with a remaining term that can exceed 50 years
  • the transfer of land from a corporation to one of its shareholders, or
  • the transfer of land to a corporation, if shares of the corporation are issued.



Providing additional information

On April 24, 2017, the province began collecting additional information to better understand trends in the housing market through the land transfer tax system. This additional data will be used for the administration and enforcement of the Land Transfer Tax Act, and to support evidence based policy development with respect to Ontario's real estate market


First‑time homebuyers

If you are a first‑time homebuyer, you may be eligible for a refund of all or part of the land transfer tax. Click here for more info on first time buyers rules regarding land transfer tax. 


Toronto Land Transfer Tax

If you buy property in the City of Toronto, you may also pay the City of Toronto's own municipal land transfer tax. Click Here to find out more informaztion on the Toronto Land transfer tax.


Other land taxes

The Non-Resident Speculation Tax (NRST) is a 15 per cent tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region by individuals who are not citizens or permanent residents of Canada or by foreign corporations (foreign entities) and taxable trustees. Click here for more info. 


Harmonized sales tax

The harmonized sales tax (HST) applies to newly constructed homes or substantially renovated homes, but does not apply to resale homes. Buyers of new homes may receive a rebate of up to $24,000 of the provincial portion (8%) of the HST. If you have any questions about the HST rebate please contact the Canada Revenue Agency at 1‑800‑959‑1953.


Paying the tax

Ontario's land transfer tax is payable when the transfer is registered.

If the transfer is not registered within 30 days of closing, you must submit a Return on the Acquisition of a Beneficial Interest in Land form to the Ministry of Finance, along with the payment of tax within 30 days after the closing date.


Some person(s) do not pay land transfer tax on certain transfers of land. The exemptions include, but are not limited to:

  • certain transfers between spouses
  • certain transfers from an individual to his or her family business corporation
  • certain transfers of farmed land between family members
  • certain transfers of a life lease from a non‑profit organization or a charity.

A deferral of land transfer tax may be available when land is transferred between affiliated corporations, and notice of the transfer is not registered on title.

Alex Prasoulis

Broker of Record

iListRealEstate Inc. Brokerage

 

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