Land transfer tax calculator

Are you planning to purchase a property in Ontario, Canada? Understanding the Land Transfer Tax (LTT) is essential as it applies to anyone buying land in the province. The LTT is a high closing cost that buyers must be prepared for to avoid surprises during the property transfer process. Let's delve into the details of the Land Transfer Tax in Ontario and how it affects homebuyers.

Land Transfer Tax in Ontario: Key Information

Unless certain exemptions apply, the Land Transfer Tax is imposed on anyone acquiring land in Ontario, including property transfers between spouses and family members. Three primary exclusions from the LTT exist for family transactions: transfers between spouses, gifts, and transfers to family businesses.

Who Pays the Land Transfer Tax in Ontario?

According to Canadian law, the buyer is responsible for paying the Land Transfer Tax, not the seller. This tax burden falls on the homebuyer, and it's essential to account for it in your budget when planning to purchase a property.

Calculating the Land Transfer Tax in Ontario

The amount of Land Transfer Tax in Ontario is determined based on several factors, including the property's purchase price, liabilities, soft costs, and upgrades. The tax rate ranges from 0.5 to 2.5 percent, depending on the property's value.

• Up to C$55,000: 0.5%
• C$55,001 to C$250,000: 1%
• C$250,001 to C$400,000: 1.5%
• C$400,001 to C$2,000,000: 2%
• Properties with two or fewer separate houses exceeding C$2,000,000: 2.5%

You can use the Land Transfer Tax Calculator to determine the exact amount of tax you'll owe for your specific property.

Land Transfer Tax in Mississauga, Ontario

Yes, Mississauga also has a Land Transfer Tax in place. This tax, combined with Toronto's high land transfer tax, has inadvertently led to a real estate bubble in Toronto's suburbs, including Mississauga. Many people opt for more expensive houses in Mississauga due to its proximity to Toronto.

First-Time Homebuyer Rebate

First-time homebuyers in Ontario may be eligible for a tax credit of up to C$4,000, which can be applied toward the province's Land Transfer Tax. However, this rebate covers the total tax for properties valued at C$368,000. The buyer is responsible for any remaining Land Transfer Tax for properties exceeding this value.

Exemptions from Land Transfer Tax

Certain situations warrant exemptions from the Land Transfer Tax, such as purchasing a brand-new home, real estate transfer between direct heirs, property distribution between spouses, transfers to family businesses, and more. Each province and municipality may have its policies regarding exemptions, so it's advisable to check with your local government or seek advice from a tax specialist.

Understanding the Land Transfer Tax is crucial when buying property in Ontario. Being aware of the tax rates, potential exemptions, and first-time homebuyer rebates will help you budget appropriately for the closing costs associated with your new home purchase. Use the LTT Calculator to calculate the amount of Land Transfer Tax you'll owe for your property in Ontario.