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- Ontario Land Transfer Tax
- Rebate
- Refunds
- Spouses
- Toronto Land Transfer Tax
- Trustees
- Types of Transfers
- Vesting Orders
When the property transaction is registered by a lawyer, the MLTT will be calculated and paid.
The amount of the MLTT will be included as part of the real estate closing costs and the real estate lawyer will be able to advise you on this matter.
A real estate lawyer will complete the application for the applicant.
No. The MLTT comes into effect for properties with closing dates either on or after February 1, 2008.
The City of Toronto performs audits of rebate applications on a random basis. If a purchaser is selected, they will be required to immediately provide the following:
- A copy of the MLTT Rebate Application
- The Agreement of Purchase & Sale and any assignments or amendments thereof
- The cancelled deposit cheque or other evidence of payment of the deposit
- A copy of the MLTT Rebate Affidavit
- The closing statement of adjustment and any other documents confirming entitlement to the rebate being claimed
- The Agreement of Purchase & Sale and any assignments or amendments thereof
The MLTT applies to all properties.
The first time home buyer rebate applies to residential property only, and does not apply to industrial, commercial, or multi-residential properties.
Land transfer tax records must be kept for a period of seven years.
Yes, first time home buyers of newly constructed homes are eligible for the provincial rebate – even if they entered into Agreements of Purchase and Sale prior to December 13, 2007.
Any purchaser who entered into an Agreement of Purchase and Sale prior to December 31, 2007 qualifies for a full rebate of the Toronto LTT.
For resale homes, the provincial rebate applies solely to first time home buyers who entered into Agreements of Purchase and Sale after December 13, 2007.
The maximum provincial land transfer tax (LTT) rebate for first time home buyers is $2,000 and the maximum Toronto LTT rebate for first time buyers is $3,725.
Both first time home buyers of new and re-sale homes are eligible to receive rebates of the provincial and Toronto land transfer taxes.
No, the Toronto LTT is payable only for properties in the City of Toronto.
A refund is for tax that is returned to a business or individual under a taxing statute or regulation and/or has been incorrectly or over paid.
A refund is also for persons who have remitted to the Minister amounts in excess of the tax payable or collectable.
A rebate is for tax correctly paid and is subsequently returned to an individual or a business under a rebate provision.
The MLTT will be charged on the registration of all conveyances of land in Toronto commencing on February 1, 2008 and on the disposition of all beneficial interests in land commencing February 1, 2008.
Teranet is the official MLTT collection agent.
Toronto City Council approved the Municipal Land Transfer Tax on On October 22, 2007 and defined it as a new taxation measure pursuant to the statutory authority granted under the City of Toronto Act, 2006.
A nominal transaction simply means that no consideration has passed between the parties to the transaction.
A transaction is exempt from tax because of the operation of an exemption in either the Land Transfer Tax Act or its regulations, even though there is value of the consideration for the transaction.
If it is obvious that one of the reasons for registering multiple conveyances is to reduce the tax liability, tax will be collected as if only one conveyance was registered.
In many cases, registering separate conveyances for properties with separate legal descriptions and Property Identification Numbers is not considered evidence of purposely reducing tax liability.
Unless an exemption applies, any consideration declared on the land transfer tax statements will trigger tax.
Unless the value of the consideration is deemed to be fair market value, the land transfer tax statements should only show the actual consideration given or to be given for the conveyance. If the value of the consideration is deemed to be fair market value, this amount should be declared. The land transfer tax is calculated on the value of the consideration declared.
The land transfer tax statements are required to set out the value of any consideration paid for the transfer.
If the estate trustee has the discretion to distribute the residual assets as they see fit and if the beneficiaries are entitled to the residual assets of an estate, the transfer of land from the estate to the beneficiary may not or may attract land transfer tax.
The land transfer tax statements must display the transferee as the only beneficiary entitled to the land under the laws of succession or intestacy. The value of the consideration is Nil, and if the lands are subject to a mortgage, the mortgage does not form part of the consideration.
Tax is payable on the value of the assets surrendered to the other beneficiaries plus any other consideration given in any agreement where one of the beneficiaries takes the land in lieu of other assets in the estate.
The land transfer tax statements should say that that the transfer is from the estate to the only beneficiary entitled to the land under the conditions of the will. The value of the consideration is Nil. If the land(s) are proven to be subject to a mortgage, the mortgage does not form part of the consideration.
A single parent who has only owned with a former spouse while married, or
An individual who has had no ownership in a principal residence. This includes a spouse.
The date of currency conversion should be the date of registration if there is no written agreement or the date that the agreement of purchase and sale is accepted and becomes a binding contract.
The land transfer tax statements must set out the value of the consideration in Canadian dollars only.
You must send your application to the Ministry of Finance. Their address is:
Ministry of Finance
Advisory and Compliance Branch
33 King Street West
PO Box 625
Oshawa ON L1H 8H9
Yes, if the refund was not claimed at the time of registration and all of the land transfer tax owing has been paid, first time homebuyers can still apply for a refund. In order to apply for a refund, you must submit:
- a copy of the docket summary, only if transfer was registered electronically
- an original, completed Ontario Land Transfer Tax Refund Affidavit for First-time Purchasers of Eligible Homes [PDF – 350 KB]
- a copy of the agreement of purchase and sale that includes all schedules, amendments and assignments
- a copy of the registered conveyance
- evidence of the amount of tax that was paid on registration
- a copy of the statement of adjustments relating to the conveyance
- for agreements of purchase and sale entered into before December 14, 2007, a copy of the Tarion New Home Warranty, which is also known as the Certificate of Completion and Possession
a copy of documents that provide proof of occupancy of the home, such as copies of newspaper/magazine subscriptions, telephone/cable bills, driver’s license, etc.
In order to receive a refund of land transfer tax, you:
- within nine months of the date of transfer, you must occupy the home as your principal residence
- must be at least 18 years of age
- if you entered into an agreement of purchase and sale before December 14, 2007, the eligible home must have recently been constructed and you must be eligible for the Tarion New Home Warranty, and you
- cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world.
Your spouse cannot have owned an eligible home, or an interest in an eligible home, anywhere in the world while being your spouse.
Once a first time home buyer is qualified for a refund, they can claim an instant refund at time of registration in one of two ways:
- If registering on paper, file an Ontario Land Transfer Tax Refund Affidavit For First-time Purchasers of Eligible Homes at the Land Registry Office.
- If registering electronically, complete the required statements under the “explanation” tab of the land transfer tax statements.
There is no time restriction where a refund is requested for land transfer tax that is paid on registration of a notice, caution where the transfer contemplated in the agreement referred to in the notice or caution did not take place.
First time home buyers refunds requests are required to be made within 18 months after the date of the transfer. All other refund requests are valid within 4 years after the date of payment of the tax.
If you overpaid land transfer tax, you can ask the Ministry of Finance for a refund. You can do this by writing a letter that explains the reason(s) for your refund request.
Your letter must include:
- Valid evidence of the amount of tax paid on registration
- a copy of the statement of adjustments
- a copy of the agreement of purchase and sale that includes all schedules and amendments
- a copy of the registered conveyance
You can mail your letter to the Ministry of Finance, which is located at 33 King Street West, PO Box 625, Oshawa, Ontario, L1H 8H9.
Ontario’s land transfer tax is payable as soon as the transfer is registered.
The harmonized sales tax (HST) applies to either extensively renovated or newly constructed homes.
HST does not apply to resale homes. Buyers of new homes may be granted a rebate of up to $24,000 of the provincial portion (8%) of the HST.
HST does not apply when calculating Land Transfer Taxes. The HST must be backed out prior to assessing the Land Transfer Tax amounts and there is no HST on Land Transfer Taxes.
Once you obtain land or a property, you pay land transfer tax to the province when the transaction closes. Land transfer tax is usually based on the amount paid for the land, in addition to the amount remaining on any debt or mortgage assumed as part of the arrangement to buy the land.
In some cases, land transfer tax is based solely on the fair market value of the land. Some examples include; the transfer of land is to a corporation, if shares of the corporation are issued, the transfer of land is from a corporation to one of its shareholders, or the transfer of a lease with a remaining term that can exceed 50 years.
The Ministry of Finance may accept the fact that the parent was on title as a trustee for the child only if the parent did not acquire a beneficial interest in the property as a result of the conveyance. If satisfactory evidence is submitted to prove the existence of a trust, the value of the consideration for the conveyance of legal title from the parent to the child will be Nil and therefore, the land transfer tax is Nil.
Vesting orders are transfers and as well and are treated the same as any other type of transfer. It is a required for the land transfer tax statements to set out the value of the consideration applicable to the order, the situations that gave rise to it, and the nature of the order.
No, land transfer tax is not always paid when land is transferred from one spouse to the other. To be exempt, the transfer must fall within one of the three situations stated below:
- the transfer is indeed in compliance with a court order
- the transfer is in compliance with a written agreement of separation, pursuant to which the parties have agreed to live apart and separate
- the only consideration given is the assumption of any encumbrance registered on the land, such as a mortgage
For the third situation to apply, it is a requirement that the separation agreement must be in writing, and must clearly state that the parties have agreed to live apart and separate.
In relation to land transfer tax, spouse means either of two persons who are married to each other, or who are not married to each other but have cohabited continuously for a period three years or more, or if they are the natural or adoptive parents of a child.
Ontario’s Land Transfer Tax is a provincial tax payable by the purchaser upon the acquisition of an interest in land by unregistered disposition or registered conveyance. In saying that, if you purchase land or a property, you are held liable for paying Land Transfer Tax to the province at the time the transaction closes.
The rebate for first-time home purchasers is up to a maximum of $3,725.00.
The maximum amount of the refund is $2,000.
To get a refund of land transfer tax, you:
- must be at least 18 years old
- must occupy the home as your principal residence within nine months of the date of transfer
- cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, and
- if you entered into an agreement of purchase and sale before December 14, 2007, the eligible home must be newly constructed and you must be eligible for the Tarion New Home Warranty.
If you have a spouse, your spouse cannot have owned an eligible home, or an interest in an eligible home, anywhere in the world while being your spouse.
You must apply for a refund within 18 months after the date of the transfer. The maximum amount of the refund is $2,000.
You are a first-time purchaser of a newly constructed or re-sale residential property, it the following criteria is met.
The definition of a first-time purchaser is:
- The purchaser is at least 18 years of age.
- The purchaser must occupy the home as his/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, nor had any ownership interest in a home, anywhere in the world while he/she was the purchaser’s spouse. If this is not the case, no rebate is available to either spouse.
The rebate for first-time home purchasers is up to a maximum of $3,725.00.
You are a first-time purchaser of a newly constructed or re-sale residential property, if the following criteria is met.
The definition of a first-time purchaser is:
- The purchaser is at least 18 years of age.
- The purchaser must occupy the home as his/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, nor had any ownership interest in a home, anywhere in the world while he/she was the purchaser’s spouse. If this is not the case, no rebate is available to either spouse.
The rebate for first-time home purchasers is up to a maximum of $3,725.00. If you are eligible for a rebate of all or a portion of the MLTT you owe, your lawyer will be able to claim the rebate electronically through Teraview software when he/she registers your transfer/deed.
You can claim an immediate refund at time of registration of the deed when transferring title into your name in one of two ways:
- If registering electronically, complete the required statements under the “explanation” tab of the land transfer tax statements (yourLawyer will do this for you).
- If registering on paper, file an Ontario Land Transfer Tax Refund Affidavit For First-time Purchasers of Eligible Homes at the Land Registry Office.
If you did not claim the exemption at the time of registration and paid all of the MLTT owing, an application for the rebate can be submitted directly to the City of Toronto along with the following documents:
- a completed Municipal Land Transfer Tax Rebate/Exemption Application
- a completed Supplementary Information Form
- a completed MLTT Authorization of Representative form
- a copy of the registered conveyance (transfer/deed)
- a copy of the docket summary (if transfer was registered electronically)
- a copy of the agreement of purchase and sale (including all schedules, amendments and assignments)
- a copy of the statement of adjustments relating to the conveyance
- a copy of documents that provide proof of occupancy of the home dated within 9 months of the date of registration, such as copies of telephone/cable bills, driver’s licence etc. (utility bills such as heat, hydro and water are not acceptable forms of proof of occupancy)
Please forward documents to:Revenue Services
Municipal Land Transfer Tax
5100 Yonge Street, Lower Level
Toronto ON M2N 5V7
If you qualify, you can claim an immediate refund at time of registration of the deed when transferring title into your name in one of two ways:
- If registering electronically, complete the required statements under the “explanation” tab of the land transfer tax statements (your Lawyer will do this for you).
- If registering on paper, file an Ontario Land Transfer Tax Refund Affidavit For First-time Purchasers of Eligible Homes at the Land Registry Office.
If you did not claim the refund at the time of registration and paid all of the land transfer tax owing, you can apply for a refund. To do this, you must submit:
- an original, completed Ontario Land Transfer Tax Refund Affidavit for First-time Purchasers of Eligible Homes [PDF – 350 KB]
- a copy of the registered conveyance (transfer/deed)
- evidence of the amount of tax that was paid on registration
- a copy of the docket summary (if transfer was registered electronically)
- a copy of the agreement of purchase and sale (including all schedules, amendments and assignments)
- a copy of the statement of adjustments relating to the conveyance
- a copy of documents that provide proof of occupancy of the home, such as copies of telephone/cable bills, driver’s licence, newspaper/magazine subscriptions, etc.
- for agreements of purchase and sale entered into before December 14, 2007, a copy of the Tarion New Home Warranty, which is also known as the Certificate of Completion and Possession
Send your application to
Ministry of Finance
Advisory and Compliance Branch
33 King Street West
PO Box 625
Oshawa ON L1H 8H9
The application and any refund payment may be audited by the Ministry of Finance. Charges may be laid and fines result if you obtain or attempt to obtain a refund by deceit, falsehood or any fraudulent means.
The tax rates calculated on the value of the consideration are:
- 0.5% up to and including $55,000
- 1% above $55,000 up to and including $400,000
- 2% above $400,000 or
- 1.5% above $400,000 where the land contains more than two single family residences or is not a residential property; and
- 1% above $40,000,000 where the land contains more than two single family residences or is not a residential property.
The land transfer tax rate is the same regardless of the purchaser’s residency.
Use the table below to calculate land transfer tax.
- Residential property: land that contains one or two single family residences
- VC: Value of the consideration for the conveyance or disposition in Canadian dollars based on the exchange rate as of the date the written agreement of purchase and sale becomes binding or otherwise if no such written agreement exists the date of registration of the transfer/deed (this should include both the cost to purchase the property and any construction costs associated directly with the purchase, such as in a situation to purchase vacant land with an agreement to build a new custom home, but does not include a scenario whereby after closing the purchasers themselves decide to renovate on their own)
| For the Value of the Consideration | Formula |
|---|---|
| up to and including $55,000 for any type of property; or | VC × 0.005 |
| above $55,000 and up to $400,000 for any type of property; or | (VC × 0.01) – $275 |
| above $400,000, for residential property that contains no more than 2 single family dwellings; or | (VC × 0.02) – $4,275 |
| above $400,000 up to $40,000,000, for property other than residential or for residential property that contains more than 2 single family dwellings; and | (VC × 0.015) – $2,275 |
| above $40,000,000, for property other than residential or for residential property that contains more than 2 single family dwellings. | (VC × 0.01) + $197,725 |
If you overpaid land transfer tax, you can ask the Ministry of Finance for a refund. Here’s how:
- Write a letter explaining the reason for your refund request and include:
- a copy of the registered transfer/deed;
- evidence of the amount of land transfer tax paid on registration;
- a copy of the agreement of purchase and sale (including all schedules and amendments)
- a copy of the statement of adjustments
- Mail your letter to the Ministry of Finance, 33 King Street West, PO Box 625, Oshawa, Ontario, L1H 8H9.
Land transfer tax is payable when the transfer/deed is registered. However, in Ontario if the purchase transaction closed and for some reason the transfer/deed was not registered within 30 days, then a “Return on the Acquisition of a Beneficial Interest in Land” form must be completed and submitted together with the land transfer tax payment to the Ontario Ministry of Finance.
How Much Will Your Ontario Land Transfer Taxes Be?
As of 2011, the Land Transfer Tax for those buying an interest in property located in Ontario is as follows:
- Half-a-percent of the value of the consideration up to and including $55,000,
- One percent of the value of the consideration exceeding $55,000, up to and including $250,000
- One-and-a-half percent of the value of the consideration exceeding $250,000,
- Two percent of the amount exceeding $400,000 for one and two family residences.
First time buyers may be exempt for some or all of the land transfer tax.
Use the table below to calculate land transfer tax.
- Residential property: land that contains one or two single family residences
- VC: Value of the consideration for the conveyance or disposition in Canadian dollars based on the exchange rate as of the date the written agreement of purchase and sale becomes binding or otherwise if no such written agreement exists the date of registration of the transfer/deed (this should include both the cost to purchase the property and any construction costs associated directly with the purchase, such as in a situation to purchase vacant land with an agreement to build a new custom home, but does not include a scenario whereby after closing the purchasers themselves decide to renovate on their own)
| For the Value of the Consideration | Formula |
|---|---|
| up to and including $55,000 for any type of property; or | VC × 0.005 |
| above $55,000 and up to $250,000 for any type of property; or | (VC × 0.01) – $275 |
| above $250,000, for property other than residential or for residential property that contains more than 2 single family dwellings; or | (VC × 0.015) – $1,525 |
| above $250,000 up to $400,000, for residential property that contains no more than 2 single family dwellings; or | (VC × 0.015) – $1,525 |
| for residential property above $400,000 that contains no more than 2 single family dwellings. | (VC × 0.02) – $3,525 |
The tax rates calculated on the value of the consideration are:
- 0.5% up to and including $55,000
- 1% above $55,000 up to and including $250,000
- 1.5% above $250,000
- 2% above $400,000 where the land contains one or two single family residences.
The land transfer tax rate is the same regardless of the purchaser’s residency.
When you acquire a real estate property, for example a house, condo, land or strip plaza, you pay land transfer tax to the province when the transaction closes.
Land transfer tax is normally based on the amount paid for the property, in addition to the amount remaining on any mortgage or debt assumed as part of the arrangement to buy the property.
In some cases, land transfer tax is based on the fair market value of the property, for example, where:
- the transfer of a lease with a remaining term that can exceed 50 years
- the transfer of land is from a corporation to one of its shareholders, or
- the transfer of land is to a corporation, if shares of the corporation are issued.
