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Toronto Land Transfer Tax

June 2, 2008

The following info will help explain the difference between the provincial and toronto land transfer tax. 

Land Transfer Tax (LTT) Rebate Program

First-time home buyers who purchase a newly constructed home will receive a rebate of the Land Transfer Tax (LTT). All other buyers will continue to pay the full applicable tax. The maximum LTT rebate is $2,000.

The 1996 Ontario Budget announced a special one-year provision to the LTT that was renewed every year and is now a permanent program.

FIRST-TIME BUYERS who purchase a NEWLY CONSTRUCTED HOME will receive a rebate of the LTT. All other buyers will continue to pay the full applicable tax.

  • The maximum rebate is $2000. If an individual owns less than 100% interest in the newly-built home, the amount of the rebate would be reduced and calculated according to the amount of interest in the home.
  • A rebate of $2,000 is equivalent to the LTT payable on a purchase price of $227,500 (net of GST).
  • Only individuals who are at least 18 years of age, have not (or spouse) previously owned an interest in a home anywhere qualify for the rebate.
  • Individuals who have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of the LTT do not qualify.

A real estate transfer tax is assessed on real property when ownership of the property is transferred from one party to another. The tax is a percentage of the value of the property based on a graduated scale:

  • 0.5% on amounts up to and including $55,000;
  • +1.0% on the amount exceeding $55,000 up to and including $250,000;
  • +1.5% on amounts above $250,000 up to and including $400,000 for residential / +1.5% on the amount in excess of $250,000 for business properties;
  • +2.0% of the amount in excess of $400,000. [residential only]
Purchase Price ** Calculation of LTT
$0 to $50,000 .005 x purchase price
$55,001 to $250,000 (.01 x purchase price) minus 275
$250,001 to $400,000
$250,001 plus (business)
(.015 x purchase price) minus 1525
$400,001 plus (residential only) (.02 x purchase price) minus 3525

These four portions added up together total the LTT payable. See the table for a simple formula. 
** If the purchase price falls within this range, then apply the appropriate formula to the purchase price. For example on a $200,000 property, the LTT calculation would be [(.01 x $200,000) minus 275 = $1725].

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