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What You Need To Know About Land Transfer Taxes (2016/2017)

toronto-land-transfer-tax toronto-land-transfer-tax

Below is some helpful info regarding provincial and municipal land transfer tax as well as related rebates. Thank you to Darlene Hanley from Hanley Mortgage Group for providing the following info.

Program Details First-time buyers of new and resale homes are eligible to receive rebates of the provincial and Toronto land transfer taxes. The maximum provincial land transfer tax rebate for first-time buyers is $4,000 and the maximum Toronto rebate for first-time buyers is $3,725.

Provincial LTT

• Provincial LTT is payable anywhere in Ontario (including Toronto)

• Maximum provincial LTT first-time buyer rebate is $4,000 (equivalent to the provincial LTT payable on a $368,000 property)

• The provincial LTT for residential properties is calculated as follows:

– 0.5% of the amount of the purchase price up to and including $55,000, plus

– 1% of the amount of the purchase price between $55,000 and $250.000, plus

– 1.5% of the amount of the purchase price between $250,000 and $400,000, plus

– 2% of the amount of the purchase price between $400,000 and $2 million, plus

– 2.5% of the amount of the purchase price above $2 million

• The tax rate on that part of the purchase price above $400,000 for buyers of all other types of property would increase from 1.5% to 2%. “All other types of property” include, for example, commercial, industrial, multi-residential and agricultural properties.

As a transitional measure, purchasers who entered into agreements of purchase and sale on or before November 14, 2016 are not subject to the increased rates of tax.

Toronto LTT

• Toronto LTT is payable only for properties in the City of Toronto

• The Municipal Land Transfer Tax (MLTT) will be charged on properties purchased in Toronto

• Toronto LTT rebates are in addition to any provincial rebate for which the buyer qualifies

• The Toronto LTT for residential properties is calculated as follows:

– 0.5% of the amount of the purchase price up to and including $55,000, plus

– 1% of the amount of the purchase price between $55,000 and $400,000, plus

– 2% of the amount of the purchase price above $400,000

First Time Buyer Eligibility

To be eligible as a first-time buyer for the provincial LTT rebate and/or Toronto LTT rebate,

• The purchaser must be at least 18 years of age.

• The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.

• The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.

• If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world, while he or she was the purchaser’s spouse. If this is the case, NO refund is available to either spouse. Note: If a purchaser’s spouse owned an interest in a home BEFORE becoming the purchaser’s spouse, the purchaser may be eligible for some rebate.

Eligibility Restricted to Canadian Citizens and Permanent Residents

Purchasers who are not Canadian citizens or permanent residents when their transaction closes have 18 months to become eligible. Upon obtaining Canadian citizenship or permanent resident status, they would be able to apply for the refund within the 18-month period.

FOR MORE INFORMATION Provincial LTT: Ontario Ministry of Finance: 1-800-263-7965

Toronto LTT: City of Toronto: 416-338-0338

The above information was provided by Darlene Hanley from Hanley Mortgage Group. For more information regarding provincial and municipal land transfer tax or any mortgage advice, contact Darlene at 416-466-0664 or visit her website at www.hanleymortgagegroup.com