Ontario Land Transfer Tax
The Land Transfer Tax (LTT) in Ontario is a tax paid on every conveyance of land tendered for registration as well as every unregistered disposition of a beneficial interest in land, unless specifically exempt under the applicable legislation. The amount of the LTT payable depends on the value of the consideration as defined in subsection 1(1) of the Land Transfer Tax Act (Ontario). The definition of the value of consideration is broader than simply the purchase price set out in an agreement of purchase and sale and can include, but is not limited to, items such as any liabilities assumed, any benefits conferred, and the cost of upgrades or extras. LTT is a marginal tax rate and each portion of the value of consideration is taxed at a unique rate based on the total value of consideration. The LTT is structured as follows:
1. For properties up to $55,000.00: 0.5% of the value of consideration.
2. Between $55,000.01 and $250,000.00: 1.0% of the value of consideration.
3. Between $250,000.01 and $400,000.00: 1.5% of the value of consideration.
4. Between $400,000.01 and $2,000,000.00: 2.0% of the value of consideration.
5. Over $2,000,000.00: 2.5% of the value of consideration, where the land contains one or two single-family residences.
City of Toronto Land Transfer Tax
If you are acquiring property in Toronto, an additional Toronto Municipal Land Transfer Tax (MLTT) is applied, in addition to the Ontario LTT. Essentially, you would pay both the Ontario LTT and the Toronto MLTT when acquiring a property located in Toronto.
The MLTT marginal rate structure is as follows:
For properties containing at least one, and not more than two, single family residences
1. For properties up to and including $55,000.00: 0.5% of the value of consideration.
2. Between $55,000.01 to $250,000.00: 1.0% of the value of consideration.
3. Between $250,000.01 to $400,000.00: 1.5% of the value of consideration.
4. $400,000.01 to $2,000,000.00: 2.0% of the value of consideration.
5. Over $2,000,000.00 and up to $3,000,000.00: 2.5% of the value of consideration.
6. Over $3,000,000.00 and up to $4,000,000.00: 3.5% of the value of consideration.
7. Over $4,000,000.00 and up to $5,000,000.00: 4.5% of the value of consideration.
8. Over $5,000,000.00 and up to $10,000,000.00: 5.5% of the value of consideration.
9. Over $10,000,000.00 and up to $20,000,000.00: 6.5% of the value of consideration.
10. Over $20,000,000.00: 7.5% of the value of consideration.
First-Time Homebuyer Rebate
First-time homebuyers (as defined in applicable legislation) in Ontario may be eligible for a rebate on the LTT of up to $4,000.00. In Toronto, an additional rebate of up to $4,475.00 on the MLTT is available for first-time homebuyers.
LTT Calculation Example:
- For a property priced at $600,000.00 in Ontario (outside Toronto):
- 0.5% on the first $55,000.00 = $275.00
- 1.0% on the next $195,000.00 ($250,000.00 - $55,000.00) = $1,950.00
- 1.5% on the next $150,000.00 ($400,000.00 - $250,000.00) = $2,250.00
- 2.0% on the next $200,000.00 ($600,000.00 - $400,000.00) = $4,000.00
- Total LTT: $8,475.00
If the same property is located in Toronto, you would double the total, paying both provincial LTT and MLTT.
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