Purchasers in most large Canadian centres can add Land Transfer Taxes to their list of closing costs. These taxes, levied on properties that are changing hands, are the responsibility of the purchaser. Depending on where you live, taxes can range from a half a per cent to two per cent of the total value of the property. Many provinces have multi-tiered taxation systems that can prove complicated. If you purchase a property for $260,000 in Ontario, for example, .5 per cent is charged on the first $55,000, 1 per cent is charged on $55,000 - $250,000, while the $250,000 - $400,000 range is taxed at 1.5 per cent. Your total tax bill? $2,375.00.
The following illustrates Land Transfer Taxes for Ontario.
Land Transfer Tax ( go to calculator )
Up to $55,000 X .5 % of total property value
From $55,000 to $250,000 X 1 % of total property value
From $250,000 to $400,000 X 1.5 % of total property value
From $400,000 up X 2 % of total property value
Toronto( go to calculator )
If you are purchasing a property in Toronto, you are required to pay the Provincial Land Transfer Tax and the Municipal Transfer Tax.
Municipal Land Transfer Tax
Up to and including $55,000 x 0.5% of the total property value
From $55,000.01 to $400,000 x 1% of the total property value
Over $400,000.01 x 2% of the total property value
Who pays Land Transfer Tax?
When you acquire a property or land, you pay Land Transfer Tax to the province when the transaction closes. Land Transfer Tax is normally based on the amount paid for the property.
If you are a first-time homebuyer, you may be eligible for a refund of all or part of the Land Transfer Tax.
If you are a first-time homebuyer and are unsure if you are eligible free free to contact Luke and he will be able to help.