Land Transfer Tax in Toronto Ontario & Other Provinces

Provincial and Municipal Land Transfer Tax & Tax Rebate

Land Transfer Tax

Land Transfer Tax is a provincial tax levied when someone purchases a property. Every province and territory in Canada charges a land transfer tax, except Alberta and Saskatchewan. In these two province the provincial government charges a much smaller registration fee instead. Some parts of Canada such as Toronto also charge a municipal Toronto land transfer tax on top of the Ontario land transfer tax.



The land transfer tax is often a forgotten cost of purchasing a property. There is no way to avoid it since it must be paid upfront. The tax is normally calculated as a percentage of the property value and can be quite significant especially on higher priced properties. How the property value is defined varies by province (i.e. purchase price, fair market value, etc.). To help out first time home buyers the provincial government in Ontario, BC and PEI offers a rebate for those buyers buying their first home who meet certain conditions.



Let’s take a look at the differences in land transfer taxes across provinces for a $500,000 property with a $400,000 mortgage:



Alberta



Alberta charges a title registration fee and an additional mortgage registration fee if there is a mortgage for the property



· Title registration fee: $50 + $1 for every $5,000 of property value



· Mortgage registration fee: $50 + $1 for every $5,000 of mortgage amount



Example ($500,000 property): 50 + (500,000/5,000) = $150 title registration fee



Example ($400,000 mortgage): 50 + (400,000/5,000) = $130 mortgage registration fee



British Columbia



The province of British Columbia charges a land transfer tax based on the following schedule:



Purchase Price

Marginal Tax Rate

First $200,000

1%

>$200,000

2%



Example ($500,000 property): 200,000 x 1% + 300,000 x 2% = 8,000 land transfer tax



You may qualify for a land transfer tax rebate based on the following schedule if you’re a first time home buyer:



Purchase Price

Rebate

$0 - $425,000

Full Rebate

$425,001 - $449,999

($450,000 – purchase price)/25,000 x land transfer tax payable

$450,000+

No Rebate



Example ($500,000 property): No rebate



Manitoba



The province of Manitoba charges a flat $70 fee and land transfer tax3 based on the following schedule:



Purchase Price

Marginal Tax Rate

First $30,000

0.0%

Next $60,000

0.5%

Next $60,000

1.0%

Next $50,000

1.5%

>$200,000

2.0%



Example ($500,000 property): 70 + 30,000 x 0% + 60,000 x 0.5% + 60,000 x 1.0% + 50,000 x 1.5% + 300,000 x 2% = $7,720 land transfer tax



New Brunswick



The province of New Brunswick charges a land transfer tax4 based on the following formula: Purchase price x 0.5%



Example ($500,000 property): 500,000 x 0.5% = $2,500 land transfer tax



Newfoundland



The province of Newfoundland charges a flat fee of $100 plus land transfer tax4 based on the following formula: 0.4% x purchase price in excess of $500



There is also a fee for registering a mortgage equal to a flat fee $100 plus an additional charge based on the following formula: 0.4% x mortgage amount in excess of $500



Example ($500,000 property): 100 + (500,000 – 500) x 0.4% = 2,098 land transfer tax



Example ($400,000 mortgage): 100 + (500,000 – 500) x 0.4% = 2,098 registration fee



Northwest Territories



Northwest Territories charge land transfer tax4 based on the following schedule:



Purchase Price

Tax Rate

<$1 million

0.15% (minimum charge of $100)

$1 million +

0.10%



There is also a fee for registering a mortgage equal based on the following formula: 0.1% x mortgage amount (subject to a minimum fee of $80)



Example ($500,000 property): 500,000 x 0.15% = $750 land transfer tax



Example ($400,000 mortgage): 400,000 x 0.1% = $400 registration fee



Nova Scotia



The land transfer tax4 charged in the province of Nova Scotia varies by municipality by does not exceed 1.5% of the purchase price. Halifax for example charges the maximum 1.5%.



Example ($500,000 property in Halifax): 500,000 x 1.5% = $7,500 land transfer tax



Nunavut



Northwest Territories charge land transfer tax4 based on the following schedule:



Purchase Price

Tax Rate

<$1 million

0.15% (minimum charge of $60)

$1 million +

0.10% (plus $1,500 flat fee)



There is also a fee for registering a mortgage equal based on the following formula: 0.1% x mortgage amount (subject to a minimum fee of $40)



Example ($500,000 property): 500,000 x 0.15% = $750 land transfer tax



Example ($400,000 mortgage): 400,000 x 0.1% = $400 registration fee



Ontario



The province of Ontario charges a land transfer tax Ontario5 based on the following schedule:



Purchase Price

Marginal Tax Rate

First $55,000

0.5%

Next $195,000

1.0%

Next $150,000

1.5%

>$400,000

2.0%



If you live in the city of Toronto than there is an additional municipal land transfer tax Toronto based on the following schedule:



Purchase Price

Marginal Tax Rate

First $55,000

0.5%

Next $345,000

1.0%

>$400,000

2.0%



Example ($500,000 property in Toronto): 55,000 x 0.5% + 195,000 x 1% + 150,000 x 1.5% + 100,000 x 2% + 55,000 x 0.5% + 345,000 + 1% + 100,000 x 2% = $12,200 land transfer tax



You may qualify for a land transfer tax rebate5 based on the following schedule if you’re a first time home buyer:



Non-Toronto Residents

Purchase Price

Rebate

First $55,000

0.5%

Next $172,500

1.0%



Toronto Residents

Purchase Price

Rebate

First $55,000

0.5%

Next $345,000

1.0%



Example ($500,000 property): 55,000 x 0.5% + 345,000 x 1% = $3,725 rebate



Prince Edward Island:



The province of PEI charges a land transfer tax6 based on the following schedule:



Purchase Price

Tax Rate

<$30,000

0%

$30,000+

1%



Example ($500,000 property): 500,000 x 1% = $5,000



You may qualify for a land transfer tax rebate6 based on the following schedule if you’re a first time home buyer:



Purchase Price

Rebate

$0 - $200,000

Full Rebate

>$200,000

No Rebate



Example ($500,000 property): No rebate



Quebec



The province of Quebec charges a land transfer tax4 based on the following schedule (the tax is collected by the municipality):



Purchase Price

Marginal Tax Rate

First $50,000

0.5%

Next $200,000

1.0%

>$250,000

1.5%



Example ($500,000 property): 50,000 x 0.5% + 200,000 x 1.0% + 250,000 x 1.5% = $6,000



Saskatchewan



The province of Saskatchewan charges a registration4 fee based on the following schedule:



Purchase Price

Marginal Tax Rate

$1 - $500

$0

$501 - $8,400

$25

>$8,400

0.30% of property value



Example ($500,000 property): 500,000 x 0.3% = $1,500 registration fee



Yukon



Yukon charges a land transfer tax7 based on the following schedule:



Purchase Price

Tax

First $5,000

$24

Next $5,000

$7.50

Next $15,000

$11.25

>$25,000

$0.25 for each $1,000



There is also an applicable mortgage registration fee7 based on the following schedule:



Mortgage Amount

Tax

First $5,000

$4.50

Next $5,000

$7.50

Next $40,000

$30

>$50,000

$0.25 for each $1,000



Example ($500,000 property): 24 + 7.50 + 11.25 + 475000/1000 x 0.25 = $161.50 land transfer tax



Example ($400,000 mortgage): 4.50 + 7.50 + 30 + 350000/1000 x 0.25 = $129.50 registration fee



Sources:



http://www.servicealberta.gov.ab.ca



http://www.sbr.gov.bc.ca



http://www.gov.mb.ca



http://www.cch.ca



http://www.fin.gov.on.ca



http://www.gov.pe.ca



http://www.canlii.org

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