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Land Transfer Tax

Land Transfer Tax

Land Transfer Tax Information

When you buy land or an interest in land in Ontario, you pay Ontario’s land transfer tax. Land includes any buildings, buildings to be constructed, and fixtures (such as light fixtures, built-in appliances and cabinetry).

Who pays land transfer tax?

When you acquire a property or land, you pay land transfer tax to the province when the transaction closes.

Land transfer tax is normally based on the amount paid for the land, in addition to the amount remaining on any mortgage or debt assumed as part of the arrangement to buy the land.

In some cases, land transfer tax is based on the fair market value of the land, 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.

First-time homebuyers

If you are a first-time homebuyer, you may be eligible for a refund of all or part of the land transfer tax.

Other land taxes

Local municipalities charge a tax on the residential or business property you own. If you have questions about municipal property tax, contact your local municipality. If your property is located in an unorganized territory (an area without municipal organization) of Ontario, property tax is collected through the provincial land tax program administered by the Provincial Land Tax Office in Thunder Bay.

If you buy property in the City of Toronto, you may also pay the City of Toronto’s own municipal land transfer tax.

Harmonized sales tax

The harmonized sales tax (HST) applies to newly constructed homes or substantially renovated homes, but does not apply to resale homes. Buyers of new homes may receive a rebate of up to $24,000 of the provincial portion (8%) of the HST. If you have any questions about the HST rebate please contact the Canada Revenue Agency at 1 800 959-1953.

Land transfer tax rates

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 for residents and non-residents of Canada.

Calculating the tax amount

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
  • LTT: Land transfer tax payable
For the Value of the Consideration Formula
up to and including $55,000 LTT = VC × 0.005
above $55,000 and up to $250,000 LTT = (VC × 0.01) – $275
above $250,000, for property other than residential LTT = (VC × 0.015) – $1,525
above $250,000 up to $400,000, for residential property LTT = (VC × 0.015) – $1,525
for residential property above $400,000 LTT = (VC × 0.02) – $3,525

Vacant lot with a construction contract

Where a construction contract is entered into as part of the arrangement relating to the purchase of a vacant lot or lots, the value of the consideration is calculated on the:

  • total cost of the lot, plus
  • cost of construction contract,

Value of consideration in foreign currency

All monies must to be expressed in Canadian dollars. The land transfer tax statements must set out the value of the consideration in Canadian dollars. The date of currency conversion should be the:

  • date that the agreement of purchase and sale is accepted and becomes a binding contract, or
  • date of registration if there is  no written agreement.

Paying the tax

Ontario’s land transfer tax is payable when the transfer is registered.

If the transfer is not registered within 30 days of closing, you must to submit a Return on the Acquisition of a Beneficial Interest in Land form to the Ministry of Finance, along with the payment of tax within 30 days after the closing date.

Some person(s) do not pay land transfer tax on certain transfers of land. The exemptions include:

  • certain transfers between spouses
  • certain transfers from an individual to his or her family business corporation
  • certain transfers of farmed land between family members
  • certain transfers of a life lease from a non-profit organization or a charity.

A deferral of land transfer tax may be available when land is transferred between affiliated corporations, and notice of the transfer is not registered on title.

Overpayment and refunds

If you overpaid land transfer tax, you can ask the Ministry of Finance for a refund. Here’s how:

  1. Write a letter explaining the reason for your refund request and include:
    • a copy of the registered conveyance
    • evidence of the amount of 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
  2. Mail your letter to the Ministry of Finance, 33 King Street West, PO Box 625, Oshawa, Ontario, L1H 8H9.

Time limits

There is no time restriction where a refund is requested for land transfer tax paid on registration of a notice or caution where the transfer contemplated in the agreement referred to in the notice or caution did not take place.

First time homebuyers refunds requests must be made within 18 months after the date of the transfer.

All other refund requests must be made within 4 years after the date of payment of the tax.

 

Land Transfer Tax Refund for First-time Homebuyers

When you buy land or an interest in land in Ontario, you pay land transfer tax. First-time homebuyers of an eligible home may be eligible for a refund of all or part of the tax.

 

 

Land Transfer Tax Refund

Top of Form

Bottom of Form

How much money could I receive?

The maximum amount of the refund is $2,000.

For example:

Cost of Home Tax Payable Tax Refund Net Tax Payable
$100,000 $725 $725 $0
$200,000 $1,725 $1,725 $0
$300,000 $2,975 $2,000 $975

If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Finance, within 18 months after the transfer. No interest is paid on this refund.

 

Do I qualify?

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.

How do I get the refund?

If you qualify, you can claim an immediate refund at time of registration in one of two ways:

  • If registering electronically, complete the required statements under the “explanation” tab of the land transfer tax statements.
  • If registering on paper, file an Ontario Land Transfer Tax Refund Affidavit For First-time Purchasers of Eligible Homes at the Land Registry Office.

Refunds claimed after registering

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
  • 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.

Harmonized Sales Tax (HST)

The HST applies to newly constructed or substantially renovated homes, but does not apply to resale homes. Buyers of new homes may receive a rebate of up to $24,000 of the provincial portion (8%) of the HST. If you have any questions about the HST rebate please contact the Canada Revenue Agency at 1 800 959-1953.

 

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It would be our pleasure to show you homes in and around the Kingston area. If you are ready to sell your home, we would be happy to take time to sit with you and discuss how to market your home successfully.

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Malinoff Brent Team
Royal LePage ProAlliance
80 Queen Street
Kingston, Ontario K7K 6W7

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