Land Transfer Tax Calculator

What Is The Land Transfer Tax?

Whenever you buy land or an interest in Ontario, you will have to pay Land Transfer Taxes. Put simply, Ontario’s Land Transfer Tax is a fee that the buyer of a property pays at the time of purchase. 

The Ontario Land Transfer Tax applies to all conveyances of land in the province. Land includes, but is not limited to, any buildings, buildings to be constructed, or fixtures.

Before you dive into our Land Transfer Tax calculator, read on to learn more about Land Transfer Taxes and if you qualify for any Land Transfer Tax rebates or refunds.

How Does The Land Transfer Tax Work?

The Ontario Land Transfer Tax works by using a sliding scale (based on property value) to calculate the tax. It’s a major part of your overall budget when you’re assessing closing costs, and the total Land Transfer Tax rate will depend on the final purchase price of the property.

Use our Land Transfer Tax calculator to see what your Land Transfer Tax rates will be.

Calculation of Land Transfer Tax

The Land Transfer Tax in Ontario follows a marginal tax rate system. The rates are:

• Up to $55,000: 0.5%
• $55,000.01 to $250,000: 1%
• $250,000.01 to $400,000: 1.5%
• $400,000.01 to $2,000,000: 2%
• Over $2,000,000 (for residential properties): 2.5%

Example Calculation

For a single purchased at $600,000, the Land Transfer Tax would be calculated as follows:

1. First $55,000:
   • $55,000 x 0.5% = $275
2. Next $195,000 ($250,000 – $55,000):
   • $195,000 x 1% = $1,950
3. Next $150,000 ($400,000 – $250,000):
   • $150,000 x 1.5% = $2,250
4. Next $200,000 ($600,000 – $400,000):
   • $200,000 x 2% = $4,000

Total LTT: $275 + $1,950 + $2,250 + $4,000 = $8,475

Land Transfer Tax Refund

Taking advantage of the first-time home buyer refund can significantly reduce your Land Transfer Tax liability. 

You might be eligible for a refund of all or part of the Ontario Land Transfer Tax, if:

• You are a Canadian citizen or permanent resident.
• You are at least 18 years old.
• You occupy the home as your principal residence within nine months of purchase.
• You have not owned a home anywhere in the world.
• If you are married, your spouse has not owned a home during the time you have been married.

Can You Avoid Your Land Transfer Tax?

Avoiding the Land Transfer Tax in Ontario entirely is generally not possible, as it is a mandatory tax on the transfer of property ownership. However, there are a few specific situations which may reduce or exempt the amount of Land Transfer Tax payable:

1. First-Time Home Buyer Rebate

First-time home buyers can receive a rebate on the provincial and municipal (if applicable) Land Transfer Tax, as detailed above.

• Provincial Rebate (Ottawa): Up to $4,000.
• Toronto Municipal Rebate: Up to $4,475.

2. Spousal Transfers

Transfers between spouses can be exempt from Land Transfer Tax. This can include situations such as:

• Transfers as a result of a divorce or separation agreement.
• Transfers where one spouse is added or removed from the title.

3. Transfers Between Family Members

Certain transfers of property between family members, especially involving farming properties, can be exempt. These are very specific situations and often require legal documentation and proof of the relationship and purpose of the transfer.

4. Reorganization of Corporate Ownership

If property ownership is transferred within a corporation or between corporations under the same ownership, provincial Land Transfer Tax may be avoided. This typically requires the involvement of legal and tax professionals to structure the transfer correctly. The commercial tax calculation differs from residential properties and is instead based on the property’s fair market value (rather than the property’s purchase price).

5. Inheritance

If a property is inherited, it may be exempt from Land Transfer Tax. However, the specifics can vary depending on how the inheritance is structured and other legal factors.

6. Other Specific Exemptions

There are other specific exemptions that may apply under certain circumstances, such as:

• Certain transfers involving charities
• Transfers of life leases
• Certain transfers involving trustees

If you’re looking at single family residences in Ontario, your Land Transfer Tax amount (based on the property’s purchase price) is not a flat fee. While the tax rate itself cannot be avoided, negotiating a lower purchase price can reduce the amount of Land Transfer Tax you owe. 

Consulting with real estate professionals can help identify any specific exemptions or strategies applicable to your situation. They can guide you through the process and ensure all requirements are met to qualify for exemptions.