How Much Are Land Transfer Taxes?

When purchasing a property in Toronto, buyers must be aware of the applicable land transfer taxes (LTT). Toronto is unique in North America as it imposes provincial and municipal land transfer taxes, effectively doubling the amount payable. These taxes are calculated on a sliding scales and are due at closing. Since these costs must be paid in cash and cannot be rolled into your mortgage, it’s crucial to factor them into your budget well in advance.

Understanding Land Transfer Taxes

Provincial Land Transfer Tax (Ontario):

• 0.5% on the first $55,000 of the purchase price
• 1.0% on the portion of the purchase price between $55,000 and $250,000
• 1.5% on the portion of the purchase price between $250,000 and $400,000
• 2.0% on the portion of the purchase price over $400,000 for properties with one or two single-family residences

Municipal Land Transfer Tax (Toronto):

• 0.5% on the first $55,000 of the purchase price
• 1.0% on the portion of the purchase price between $55,000 and $400,000
• 2.0% on the portion of the purchase price over $400,000

First-Time Home Buyer Rebates

First-time homebuyers can benefit from significant rebates to offset these costs. Eligible purchasers who have never owned a home anywhere in the world can receive rebates of up to:

• $4,000 on the Ontario portion of the land transfer tax
• $4,475 on the Toronto portion of the land transfer tax

These rebates can substantially reduce the financial burden for first-time buyers, making homeownership more accessible.

Calculating Your Land Transfer Tax Liability

To accurately calculate your potential land transfer tax liability, it’s advisable to consult with a real estate lawyer or use online calculations designed for this purpose. Here’s a quick breakdown of how the sliding scales works:

By being aware of these taxes and planning accordingly, you can ensure a smoother financial transition into homeownership in Toronto.

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