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What Is Toronto Land Transfer Tax?
Toronto Land Transfer Tax Explained
Toronto land transfer tax is a government required tax, applicable to home buyers purchasing real estate in Toronto. Along with the Ontario Land Transfer Tax, real estate purchasers in Toronto pay double the land transfer tax.
You may qualify for the Toronto first time home buyer tax credit, of up to $4,475, in additional to the Land Transfer Tax Ontario Tax Credit, valued up to $4,000.
Those whom purchase real estate in Scarborough, North York, Etobicoke, York, and Toronto are subject to the municipal land transfer tax and the provincial land transfer tax.
How To Calculate Toronto Land Transfer Tax
Toronto Land Transfer Tax Calculation Explained
Example Of Toronto Land Transfer Tax Calculation
For a home purchase price of $500,000 in Toronto, Ontario:
- The first $55,000 of purchase price is taxed at rate of 0.5% ($275)
- Then the next $195,000 ($55,000.01 to $250,000.00) is taxed at a rate of 1.0% ($1,950),
- Then the next $150,000 ($250,000.01 to $400,000.00) is taxed at a rate of ($2,250)
- The remaining $100,000 of the purchase price, based on the tax bracket of $400,000.01 to $2,000,000 is taxed at a rate of 2.0% ($2,000)
- The Municipal Land Transfer Tax in this case would be $6,475
- The Provincial Land Transfer Tax in this case would also be $6,475 (since it’s calculated the same as the municipal land transfer tax)
- The total land transfer tax will be $12,950
If the buyer is first time home buyer, they will qualify for $4,000 credit for the provincial portion, reducing the provincial LTT to $2,475. In additional they will receive the Toronto land transfer tax rebate in the amount of $4,475, and will owe $2,000 to land transfer tax Toronto. The total land transfer tax will be $4,475 as a first time home buyer in Toronto, in this example.
How Toronto Land Transfer Tax is Calculated
See Chart Below To See How Land Transfer Tax Is Calculated In Toronto
Toronto First Time Home Buyer Tax Credit (Toronto Land Transfer Tax Rebate)
Toronto First Time Home Buyer Rebate Explained
The Toronto Land Transfer Tax Credit, also known as the Toronto Land Transfer Tax Rebate, will cover home buyer’s for the full amount of the Toronto Land Transfer Tax up to $4,475. This means when purchasing a property in Toronto as a first-time home buyer, you can purchase for up to $400,000.00, without paying any Toronto Land Transfer Tax, however there will be balance of $475 owing toward the Ontario land transfer tax as the maximum rebate for the OLTT is $4,000
Requirements For Toronto First Time Home Buyer Tax Credit (Toronto Land Transfer Tax Rebate)
- Purchaser(s) must be a Canadian Citizen or have Permanent Resident (PR) Status in Canada
- Must be at least 18 years of age
- Purchasers must live in the home within 9 (nine) months of the purchase date
- Cannot have owned a property in any other country in the world
- Purchasers spouse cannot have owned any real estate while being your spouse