Toronto Land Transfer Taxes

You are probably aware that Toronto has its own Land Transfer Tax. This is in addition to the regular Provincial Land Transfer tax which applies throughout the Province.

This new Toronto Land Transfer Tax was passed by Council on 22 October 2007 and took effect on 1 February 2008. The present Mayor, Rob Ford ran on a platform which included the elimination of this tax. Although he was elected based in part upon his opposition to this unpopular tax, it has not been rescinded. It would also appear that Rob Ford has lost the confidence of Toronto Council, so this tax is likely to stay in full force, at least until the next election, which is about two years away in 2014.

There were some transitional rules which dealt with the implementation of the imposition of the tax, but all the relevant time periods have now long since expired.

So, here is the tax:

For all purchasers:

• one-half of one percent of the value of the consideration on sales up to and including $55,000;

• one per cent of the value of the consideration on sales exceeding $55,000 up to and including $400,000;

• two per cent of the value of the consideration of land containing one and/or two single family residences exceeding $400,000;

• one and a half per cent of the value of the consideration on commercial properties including multi-residential units exceeding $400,000 up to $40 million;

• one per cent of the value of the consideration which exceeds $40 million.

Where the net revenue after transaction fees would result in revenue to the City of less than $2.00, the purchase would be exempt from the Toronto Land Transfer Tax.

For first time purchasers:

A rebate of up to $3,725 will apply to first-time purchasers of both new and existing homes. This means a full rebate for first-time buyers of homes valued at $400,000 or less. For example, a first-time purchaser of a home valued at $600,000 would pay land transfer tax according to the scale shown above, and receive a rebate of $3,725. A first time home buyer of a home valued at $300,000 would get a full rebate on the land transfer tax.

These taxes only apply in the City of Toronto, so be careful around the perimeter of the City and know whether these taxes apply to you or not.

If you are concerned about the tax or rebates, consult a lawyer or solicitor practising in the real estate field for advice.

Brian Madigan LL.B., Broker

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