When you buy land or an interest in land in Ontario, you pay Ontario's land transfer tax. Land includes, but is not limited to, any buildings, buildings to be constructed, and fixtures (such as light fixtures, built‑in appliances and cabinetry). In addition, for certain transfers of land within the Greater Golden Horseshoe Region, a 15% Non‑Resident Speculation Tax (NRST) may apply.
Who pays land transfer tax?
When you acquire land or a beneficial interest in 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, such as in the following examples:
- the transfer of a lease with a remaining term that can exceed 50 years
- the transfer of land from a corporation to one of its shareholders, or
- the transfer of land to a corporation, if shares of the corporation are issued.
Calculating the tax amount
Read on: Calculating Land Transfer Tax
Providing additional information
On April 24, 2017, the province began collecting additional information to better understand trends in the housing market through the land transfer tax system. This additional data will be used for the administration and enforcement of the Land Transfer Tax Act, and to support evidence based policy development with respect to Ontario's real estate market.
All persons who purchase or acquire land in Ontario that contains at least one and not more than six single family residences, or agricultural land, are required to provide this additional information.
Read on: Prescribed Information for the Purpose of Section 5.0.1
If you are a first‑time homebuyer, you may be eligible for a refund of all or part of the land transfer tax.
Read on: Land Transfer Tax Refunds for First‑Time Homebuyers
Other land taxes
The Non-Resident Speculation Tax (NRST) is a 15 per cent tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region by individuals who are not citizens or permanent residents of Canada or by foreign corporations (foreign entities) and taxable trustees.
Read on: Non-Resident Speculation Tax
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.
More about provincial land tax
If you buy property in the City of Toronto, you may also pay the City of Toronto's own municipal land transfer tax.
Read on: City of Toronto 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 1‑800‑959‑5525.
Read: GST/HST New Housing Rebate
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 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.
Download: Return on the Acquisition of a Beneficial Interest in Land
Some person(s) do not pay land transfer tax on certain transfers of land. The exemptions include, but are not limited to:
- 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.
**Content Provided By https://www.fin.gov.on.ca/en/tax/ltt/