The Land Transfer Tax is one of the least pleasurable aspects of purchasing real estate or other property in Ontario, particularly in the City of Toronto (LTT). You are liable for the provincial Land Transfer Tax if you purchase property in Ontario (LTT).
You must also pay the City of Toronto’s Municipal Land Transfer Tax if you are purchasing property in that city (MLTT). As a result, you should budget for paying the Ontario Land Transfer Tax and potentially even the Municipal Land Transfer Tax for Toronto if you’re thinking about purchasing real estate in Toronto or in Ontario.
This article provides information for non-residents (non-Canadian citizens and/or people who are not permanent residents in Canada) purchasing property in the City of Toronto or the Province of Ontario. It describes what land transfer taxes are, how much they cost, how the fees are calculated, who is required to pay them, who is exempt, and who is responsible for paying them.
What is the Land Transfer Tax (LTT)?
Anyone purchasing real estate in Ontario is subject to the Land Transfer Tax (LTT), which is paid at closing. You must pay this tax when you acquire land ownership.
Unless you are expressly exempt from paying this tax under the Land Transfer Act or Regulations, you must pay this tax on every conveyance (the transfer of the legal title of land from one party to another) tendered for registration and on every unregistered disposition for a beneficial interest in land in Ontario.
The Land Transfer Tax Act includes this. Regardless of whether the land transfer is officially recorded in Ontario’s land registry system, this Land Transfer Tax is due for every transfer of land in the province of Ontario depending on the value of the consideration.
Every province in Canada levies a land transfer tax, with the exception of Saskatchewan and Alberta, which impose a slightly lesser transfer fee.
How much does Ontario’s Land Transfer Tax (LTT) cost?
The Land Transfer Tax (LTT) rates for circumstances where the agreement, purchase, or sale was made after November 14, 2016, and the registration or disposition took place on or after January 1, 2017, are listed below. The value of consideration in this situation is based on the ultimate purchase price of the land or other property, and the following tax rates for that value are listed below.
However, the Land Transfer Tax (LTT) is often calculated based on the price paid for the land (the gross sale price), as well as the amount of money left over for any mortgage or loan assumed as part of the deal to buy the land. The fair market value of the land will be used as the basis for the Land Transfer Tax in some circumstances, such as the ones listed below:
- 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
- the transfer of land to a corporation, if shares of the corporation are issued.
You can read more about Ontario’s Land Transfer Tax here or speak with a real estate lawyer if you’re not sure how it might apply to you.
Use this free land transfer tax calculator to avoid having to perform the difficult calculations. It will let you enter the purchase price of a home you might be interested in, your location to determine whether you must pay a municipal land transfer tax, and it will tell you how much your land transfer tax would be for a property selling at a specific price in a specific region of Ontario.
How much does the City of Toronto’s Municipal Land Transfer Tax (MLTT) cost?
In addition to paying the Provincial Land Transfer Tax of Ontario, you will also be liable for paying the Municipal Land Transfer Tax (MLTT) of the City of Toronto if you are purchasing real estate in that city. The Municipal Transfer Tax (MLTT) rates for the City of Toronto are comparable to the rates for the provincial Land Transfer Tax for Ontario (LTT).
When you purchase a property or transfer the title of real estate in Toronto to another person, the City of Toronto’s website offers a free MLTT calculator that you may use to calculate and estimate how much you could be required to pay for the Municipal Land Transfer Tax.
Who is responsible for paying the Land Transfer Tax in Ontario and Toronto?
When a title transfer or transaction is completed in Ontario, you must pay the province of Ontario the land transfer tax whenever you purchase land or a beneficial interest inland. The Land Transfer Tax (LTT), as was previously noted, is typically (the gross sale price for the property), plus the sum left over to pay any mortgage or debt accepted as part of the agreement to buy the land.
The definition of “land” in the province of Ontario is “land includes, but is not limited to, any buildings, buildings to be constructed, and fixtures (such as light fixtures, built-in appliances, and cabinetry).” Furthermore, if you are purchasing residential property in the City of Toronto or within Ontario and you are a non-resident, i.e. you are not a permanent resident.
For some land transfers inside the Greater Golden Horseshoe (GGH) area, foreign nationals, foreign entities, trusts, and taxable trustees may be required to pay an extra tax. The Non-Resident Speculation Tax (NRST), which is 15% of the consideration value for a residential property, is this charge.
Beginning on April 21, 2017, all real estate purchases made by non-residents in Ontario’s Greater Golden Horseshoe Region (GGH) were subject to the Non-Resident Speculation Tax (NRST). If you are purchasing real estate in the City of Toronto, you must also pay the Non-Resident Speculation Tax (NRST) in addition to the Land Transfer Tax (LTT) for Ontario and the Municipal Land Transfer Tax (TMLTT) for Toronto.