Example Ontario land transfer tax calculation
In most provinces the tax is calculated as a % of property value, using asking price as a close estimate. Homebuyers in Toronto, however, also incur an additional municipal tax. To help offset the unwelcome cost, Ontario, British Columbia, Prince Edward Island and the City of Toronto offer land transfer tax rebates for first-time homebuyers.
The Ontario land transfer tax (LTT) is a marginal tax and each portion of your home’s value is taxed at a unique rate. These tax rates are as follows:
|Purchase Price of Home||Land Transfer Title Fee|
|On $55,000 to $250,000||1.0%|
|On $250,000 to $400,000||1.5%|
If you are purchasing a home in Toronto, it is important to note that an additional Toronto Land Transfer Tax will also apply. Beyond the land transfer tax you will also have to pay closing costs in Ontario when purchasing a home. These closing costs could include fees for an Ontario real estate lawyer and Ontario home inspector. Ontario land transfer tax rebate in Ontario
For first time home buyers, there is a maximum $2,000 tax rebate on the Ontario land transfer tax. Based on Ontario’s land transfer tax rates, this rebate will cover the full tax for homes worth up to $227,500. For homes worth more than $227,500, buyers will only receive the full $2,000 rebate.
|Purchase price of home||Land title transfer tax||First-time home buyer rebate||Net tax payable|
First-time home buyer eligibility in Ontario
- You must be 18 years or older.
- You must occupy the home within 9 months of purchase.
- You cannot have owned a home or interest in a home anywhere in the world.
- Your spouse cannot have owned a home while being your spouse (but may be a previous home owner).
- If the home is newly constructed, it must be eligible for home warranty.
- Home buyers must apply for the refund within 18 months of purchase.
ApplicationTaxpayers can claim an immediate refund when registering the land transfer papers and paying their taxes. Tax rebate application forms are available online for home buyers registering electronically or on paper at government offices.If the rebate is not claimed at the time of registration, the full tax is paid and a refund claim can be made to the Ministry of Finance within 18 months. Information required for the application include:
- A completed Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible homes.
- A copy of the registered land transfer deed.
- A copy of the agreement of purchase and sale
- A copy of a document that provides proof of residence, such as a driver’s license, telephone/cable bills, etc.
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