What is a Land Transfer Tax (LTT)?
LTT is a tax paid to the government upon closing a real estate transaction. It is paid buy the purchaser or the house/condo, not the seller.
- Spouses: if transfer of ownership/title is between common law partners or spouses and the transfer is in compliance with a written separation agreement
- Gifts: there is no explicit exemption from tax on a property received as a gift from a family member stated in the Land Transfer Tax Act. However, as long as no assumption of liabilities and no payment is given to the “transferor” of the property, the value used to calculate LTT is nil and so is the tax
- Family business corporations: A family business corporation is a private corporation where members of one and the same family own all shares. To be exempt of LTT, the objective of the transfer must be to allow the transferee corporation to continue operation of the active business on the land being transferred
- First-time homebuyers: you may be eligible for a refund of up to $2,000. To be eligible, you must:
- Be 18 years old or older,
- Occupy the home as your principal residence in the first 9 months following the transfer
- Have never owned an eligible home anywhere in the world
* Your spouse cannot have owned an eligible home anywhere in the world after becoming your spouse – if your spouse owns a house/condo after marriage, you have interest in her/his property which means you are not a first time homebuyer
Form for rebate application: You must apply for a refund within 18 months after the date of the transfer.
Click here to open the form: http://www.forms.ssb.gov.on.ca/mbs/ssb/forms/ssbforms.nsf/GetFileAttach/013-0300E~1/$File/0300E.pdf
How much LLT will I pay?
LTT is based on the amount paid (the value of the consideration) for the land, as well as the amount remaining on any mortgage or debt assumed in order to buy the land.
• 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.
What if I am not a resident of Canada?
The land transfer tax rate for residents and non-residents of Canada is the same.
*** We advise that you consult with a real estate lawyer when inquiring and verifying information about LTT ***
May 27, 2016
Team Riaz Ghani