Land Transfer Taxes

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Purchasers in Ontario can add LAND TRANSFER TAX to their list of closing costs. These taxes, levied on properties that are changing hands, are the responsibility of the purchaser. Depending on your price range, taxes can range from a half a per cent to two per cent of the total value of the property.

The GOOD NEWS is first time home buyers who reside in the property are currently eligible to apply at closing for a cash refund of up to $2,000.00 of Ontario Land Transfer Taxes paid. Recently the City of Toronto implemented an additional Toronto Land Transfer Tax. Likewise purchasers of first time homes not exceeding the purchase price of $400,000.00 are elibible for a refund of Toronto's additional taxes.

Ontario has a multi-tiered taxation system that can prove a little complicated. If you purchase a property in Ontario, for example, 0.5 per cent is charged on the first $55,000 or $275.00; 1 per cent is charged on $55,000 - $250,000 or $1950.00; while the $250,000 - $400,000 range is taxed at 1.5 per cent or $2250.00; with balance of purchase price charged at 2%. On a purchase price of $450,000 what is your total tax bill? $5,475.00. In the case of an elegible First Time Home Buyer the total tax bill would be reduced to $3,475.00

The following chart illustrates Land Transfer Taxes should you wish to make further calculations:

ONTARIO
Land Transfer Tax
First $55,000 at .5 % or up to $275.00
From $55,000 to $250,000 at 1 % or up to $1950.00
From $250,000 to $400,000 at 1.5 % or up to $2,250.00
From $400,000 up at 2 % on balance - plus this calculation