Ontario Land Transfer Tax Calculator
Ontario Land Transfer Tax
Tax must be paid when property in the province of Ontario changes hands. There are very few exemptions from this tax. (Certain jurisdictions, such as Toronto, levy an additional land transfer tax but most other jurisdictions, including Ottawa, currently do not.) This is a one-time levy that occurs when the property is purchased, and is separate from Property Tax which is levied every year by the municipality in which the property resides.
The Ontario Land Transfer Tax is caculated based upon the purchase price, and has an increasing rate similar to income tax. (Note that the tax is calculated somewhat differently on new homes purchased directly from the builder because HST is included in the purchase price and must be removed before applying the calculation.) The calculation is:
0.5% on the first $55,000 of the purchase price, plus
1.0% on the amount exceeding $ 55,000 up to and including $250,000, plus
1.5% on the amount exceeding $250,000 up to and including $400,000, plus
2.0% on the amount over $400,000. Be aware that for non-residential properties, such as industrial or commercial real estate, there is no 2% charge since the tax rate is 1.5% for any amount of purchase price over $250,000 regardless of the total price.
For example: The Ontario Land Transfer Tax on a property purchased for $200,000 is calculated as $275.00 on the first $ 55,000 (0.5% = $ 275.00), plus $1,450.00 on the next $145,000 (1.0% = $1,450.00), for a total of $1,725.00.
Land Transfer Tax Refunds For First-Time Homebuyers
Important: You may be eligible for a refund of this tax! Buyers of both resale and new construction homes in Ontario are able to get a partial or full reduction of their Ontario Land Transfer Tax. The Ontario government has a detailed list of qualifications (which you can read here).
Basically you must be 18 or older, you must use the home as your primary residence, and you cannot have owned a home anywhere in the world - ever. If you are married or commonlaw, your spouse cannot have owned anywhere during the marriage. Your lawyer or real estate agent can help you determine more specifically if you are eligible.
This refund is usually instant and applied to reduce or eliminate your Ontario Land Transfer Tax payable at closing, but can also be claimed afterward if it was not done at closing.
Also! The Government of Canada provides a "First-time home buyers' tax credit", which is a refund you can claim on your income tax. The rules are slightly different: the property must be in Canada, and you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years. Persons with disabilities are entitled to the credit regardless of previous home ownership.
Please be sure to discuss your individual situation with your lawyer and/or Realtor® in case you have special qualifications or the rules have changed.