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Understanding Land Transfer Tax for Home Buyers

Understanding Land Transfer Tax for Home Buyers

Date Posted: March 13, 2024

 

 

 

 

Purchasing a home is an exciting milestone, but it's important to understand the financial obligations involved. One such obligation in Ontario is the Land Transfer Tax (LTT). In this article, we will provide an overview of the LTT, including how it is calculated, potential refunds for first-time homebuyers, and important considerations for buyers. 

 

What is Land Transfer Tax (LTT)? 

Land Transfer Tax is a fee imposed by the Ontario government on the purchase or transfer of land or an interest in land. It is typically paid by the buyer and is based on the purchase price of the property. 

 

Calculation of Land Transfer Tax 

The amount of LTT payable depends on the purchase price of the property. The current LTT rates Provincial can be found at the bottom of the article.  

 

First-Time Home Buyer Refund

To assist first-time homebuyers, the Ontario government offers a refund of the LTT. Eligible first-time homebuyers can receive a refund of all or part of the LTT, helping to reduce the upfront costs of purchasing a home. It's important to note that as of January 1, 2017, the eligibility for the first-time homebuyer refund program is restricted to Canadian citizens and permanent residents.

 

Considerations for Home Buyers

When budgeting for your home purchase, it's crucial to consider the LTT. It is wise to consult with a mortgage broker or a knowledgeable real estate professional to estimate the LTT amount based on the purchase price of the property. This will help you plan and manage your finances effectively. 

Additionally, it's essential to factor in other costs associated with buying a home, such as legal fees, home inspections, appraisal fees, and moving expenses. These expenses can add up, so being prepared financially is key.

 

Next Steps

Understanding the Land Transfer Tax is essential for homebuyers in Ontario. By familiarizing yourself with the LTT rates, potential refunds, and other associated costs, you can make informed decisions when purchasing a home. Consult with a mortgage broker at Mortgage Brokers Ottawa for personalized guidance throughout the homebuying process and to explore available mortgage options. 

Remember, buying a home is a significant investment, and being well-informed about the financial aspects will help ensure a smooth and successful homebuying experience.

 

Current LTT Rates Provincially:  

ONTARIO  

In Ontario, you’ll pay a land transfer tax based on your home’s value.  

  • 0.5% of the first $55,000 of the home’s value. 

  • 1.0% of any additional value between $55,000 and $250,000. 

  • 1.5% of any additional value between $250,000 and $400,000.   

  • 2.0% of any additional value between $400,000 and $2 million.   

  • 2.5% of any additional value that’s more than $2,000,000 if the land contains no more than two single-family residences.   

Toronto  

  • 0.5% of your home’s value up to $55,000. 

  • 1.0% of any amount between $55,000 and $250,000. 

  • 1.5% of any amount between $250,000 and $400,000. 

  • 2.0% of any amount between $400,000 and $2 million. 

  • 2.5% of any amount between $2 million and $3 million. 

  • 3.5% of any amount between $3 million and $4 million. 

  • 4.5% of any amount between $4 million and $5 million. 

  • 5.5% of any amount between $5 million and $10 million. 

  • 6.5% of any amount between $10 million and $20,000,000. 

  • 7.5% of any amount above $20 million. 

 

ALBERTA 

Alberta doesn’t have a land transfer tax.  

Instead, the government charges two fees: one to process the transfer of the property title and another to register your mortgage.  

  • You’ll pay $50 plus an additional $2 per $5,000 of the property’s purchase price for the title transfer. 

  • For the mortgage registration, you’ll pay $50 plus $1.50 for each $5,000 of your mortgage amount. 

 

SASKATCHEWAN 

You’ll pay a transfer fee equal to 0.4% of your property’s value.  

You’ll also pay a set fee based on your mortgage amount as follows: 

  • For mortgages under $250,000: $180 

  • For mortgages between $250,000 and $500,000: $250 

  • For mortgages between $500,000 and $750,000: $500 

  • For mortgages between $750,000 and $1,000,000: $750 

  • For mortgages above $1,000,000: $1,000 

 

B.C.  

B.C.’s tiered-rate system means more expensive homes result in a higher rate. You’ll pay: 

  • 1% of the first $200,000 of your home’s value. 

  • 2% of any amount between $200,001 and $2,000,000. 

  • 3% of any amount greater than $2,000,000. 

 

MANITOBA 

In Manitoba, you’ll pay: 

  • No tax on the first $30,000 of your home’s value. 

  • 0.5% of any amount between $30,001 and $90,000. 

  • 1.0% of any amount between $90,001 and $150,000. 

  • 1.5% of any amount between $150,001 and $200,000. 

  • 2.% of any amount over $200,000. 

 

QUEBEC 

Each municipality in Quebec administers its own land transfer tax. 

Montreal’s land transfer tax is based on your home’s value. 

  • 0.5% of your home’s value up to $55,200. 

  • 1.0% of any amount between $55,200 and $276,200. 

  • 1.5% of any amount between $276,200 and $552,300. 

  • 2.0% of any amount between $552,300 and $1,104,700. 

  • 2.5% of any amount between $1,104,700 and $2,136,500. 

  • 3.5% of any amount between $2,136,500 and $3,113,000. 

  • 4.0% of any amount above $3,113,000. 

 

NEW BRUNSWICK 

New Brunswick charges a 1% rate of the home’s value in many cases. 

 

NEWFOUNDLAND 

Newfoundland doesn’t have land transfer taxes, but you’ll pay a fee to register your mortgage. 

The fee is $100 plus $0.40 for every $100 of your home’ value above $500. 

 

PRINCE EDWARD ISLAND 

The property transfer tax on Prince Edward Island is 1% of the greater of the home’s purchase price or its assessed value. 

So, if the purchase price was $250,000, the transfer taxes will be $2,500. 

 

NORTHWEST TERRITORIES 

In the Northwest Territories, you’ll pay fees based on your home’s value and your mortgage’s value. [10] 

You’ll pay $2.00 for each $1,000 of your home’s value, with a $1 minimum. If your home’s value is above $1 million, you’ll pay $2,000 plus $1.50 for each $1,000 of value above $1 million. 

If you take out a mortgage to pay for your home, you’ll pay $1.50 for every $1,000 of the mortgage amount, with a minimum of $80. 

 

YUKON FEE DETAILS 

You’ll pay a flat fee, which is based on your home’s value, and an additional fee based on the change in value since your home was sold.  

The variable fee, called the assurance fund fee, is $20 for the first $10,000 your home’s value has risen since it was last sold plus $10 for every additional $10,000 of increased value. 

The flat fee is: 

  • $50 for a home value of less than $100,000. 

  • $150 for home values between $100,000 and $500,000. 

  • $350 for home values between $500,000 and $3 million. 

  • $550 for home values between $3 million and $10 million. 

  • $750 for home values above $10 million.