This is a question I get all the time from buyersespecially first time buyers and sellers, who pays Land Transfer Tax? It is a valid question and if purchasing property in Toronto buyers need to be aware that there are two Land Transfer Tax to be paid.
First one is the provincial land transfer tax. This tax has been around since the beginning of time (not really) and most people in Ontario are aware of it. You buy a property in the province of Ontario you are expected to pay tax for that transaction, no brainer right?
The second tax if you are buying property in Toronto is the Municipal Land Transfer Tax aka Toronto Land Transfer Tax that became effective February 1st, 2008. This is a huge money maker for the City of Toronto bringing in millions of dollars a year.
I personally can’t stand this tax. Why as Torontonians do we have to pay two taxes? Nobody else in Ontario does, why do we? I guess it comes down to the economics of it, if you can afford to live in Toronto you can afford to pay the extra Land Transfer Tax. As my lady would say “that’s a bunch of salami!”
Rob Ford pretty much got elected saying that he would get rid of the Toronto Land Transfer Tax as Mayor. Fat chance Ford! Almost three years and nada, zilch, zero movement on the tax. It makes too much money for the city and I’m sure there are many hoops for him to jump through, no pun intended.
Anyways, back on topic who pays land transfer tax? The Buyer! Sellers don’t pay land transfer tax. Here is the breakdown of how the tax is paid.
Provincial Land Transfer Tax
The tax rate has not changed since June 1, 1989.
- 0.5% of the value of the consideration up to and including $55,000,
- 1% of the value of the consideration which exceeds $55,000 up to and including $250,000, and
- 1.5% of the value of the consideration which exceeds $250,000, and
- 2% of the amount by which the value of the consideration exceeds $400,000 for land that contains at least one and not more than two single family residences.
From the Ontario Ministry of Finance website.
Municipal Land Transfer Tax
| Value of Consideration | MLTT Rate |
| Up to and including $55,000.00 | 0.5% plus |
| $55,000.01 to $400,000.00 | 1.0% plus |
| Over $400,000.00 | 2.0% |
From the City of Toronto website.
Confused yet? It is easier to calculate than you think, but here is a great place to calculate it by just putting in the purchase price of your property for both taxes.
Now, if you are a first time buyer I have some great news for you. There is a land transfer tax rebate available. Just make sure that you are actually a first time buyer and there are no other properties in your name.
Provincial land transfer tax rebate is up to $4000.
Municipal land transfer tax rebate is up to $4475 (only applies within City of Toronto boundaries).
More reading on the land transfer tax rebate.
That is my post for today. If you have more questions on the topic please contact me david@davidspeedie.com or 647 244 3931.
If you are a buyer or seller and want to stay up-to-date on the Toronto real estate market please sign up for my free neighbourhood reports.
