| Real Estate Essentials

There are many additional fees that come with purchasing a property – but what do they all mean? Today I will be focusing on the Toronto Land Transfer Tax. I will explain to you what it is, who is eligible to pay for it, how to find out how much it will cost you, and much more.

What Is The Toronto Land Transfer Tax?

In addition to the Ontario Land Transfer Tax, the Toronto Land Transfer Tax is a tax that is paid if you are purchasing a home within the following boundaries: Steeles Avenue as the North border, Etobicoke as the West border, Scarborough as the East border and Lake Ontario as the South border.

Who Pays For The Toronto Land Transfer Tax?

If you are a Buyer of a house or condo in Toronto, you must pay the Toronto Land Transfer Tax. Sellers do not pay this tax. Your real estate lawyer will arrange all the taxes to be paid when the deed to your newly purchased home is transferred to your name (aka closing day!).

How Much Does The Toronto Land Transfer Tax Cost?

In order to plan a realistic budget while you are house hunting, the City of Toronto has created a Toronto Land Transfer Tax calculator to help you get a better idea of how much the tax will cost. Just as the website says, it is important to remember that this calculator is simply an estimation tool and should not be considered to be the final cost. Your real estate lawyer will calculate your tax due upon closing. Speak to them for more details.

If you wish to understand how the calculator tallies the amount, here is a simple breakdown of the rules the City of Toronto uses:

  • 0.5% up to and including the first $55,000.00
  • 1% of the value which exceeds $55,000.00 up to and including $250,000.00
  • 1.5% of the value between $250,000.00 and $400,000.00
  • 2% of the value between $400,000.00 and $2,000,000.00
  • 2.5% of the value over $2,000,000.00

Thankfully, we do not need to calculate it all ourselves and we can use the City of Toronto’s calculator!

Are There Any Tax Credits, Rebates or Refunds Available For The Toronto Land Transfer Tax?

This is the million-dollar question on all buyer’s minds. The answer is yes! There is a land transfer tax rebate for Toronto home buyers so long as they meet the following requirements:

  • The buyer must be a Canadian citizen or permanent resident of Canada
  • The buyer must be older than 18 years
  • The buyer must occupy the home within nine months of purchase
  • The buyer cannot have owned a home anywhere in the world
  • The buyer’s spouse cannot have owned a home while being your spouse

Therefore, if you and your spouse (if you have one) are first-time home buyers, not only in Canada but anywhere in the world, you are eligible to receive a rebate up to a maximum of $4,475.00!

If you have more questions about the Toronto Land Transfer Tax please feel free to contact me here. I will endeavour to answer all your questions, or recommend you to real estate lawyers I know and trust to give you knowledgeable advice.