What is Land Transfer Tax and how is it calculated?

Land Transfer Tax or “sales tax” levied by the Province of Ontario. The amount of the tax increases as the purchase price increases. Tax is payable in connection with the purchase of any real estate (including condominiums, cooperative apartments and vacant land) in Ontario Land Transfer Tax (L.T.) is calculated as follows:

  1. if the purchase price of the property is less than $55,000.00, the tax is 1/2% of the purchase price (this is $5.00 per thousand);
    example: if purchase price is $55,000.00, L.T.T. would be $275.00
  2. if the purchase price is between $56,000 and $250,000.00, the tax is 1% of the purchase price (this is $1.00 per thousand) less $275.00;
    example: if purchase price is $250,000.00 L.T.T. would be $2,500.00 less $275.00-$2,225.00
  3. if the purchase price is more than $250,000.00, the tax is $2,225.00 plus 15% of purchase price in excess of $20,000.00 (this is $15.00 per thousand for each thousand over $250,000.00);
    example: if purchase price is $400,000 L.T.T. would be $2,225.00 plus $2,250.00 = $4,475.00
  4. if the purchase price is more than $400,000 for residential properties having one or two units, there is a surcharge of $5.00 per thousand over $400,000.00 which, essentially, results in tax being 2% of the purchase price in excess of $400,000.00;
    example: if purchase price is $500,000.00 L.T.T. would be $2,225.00 plus $2,250.00 plus $2,000.00 = $6,475.00

Land Transfer is paid at the time of closing. When you co for your appointment to sign the closing document, the bank draft or certified check that you will be asked to bring with you will include the balance of your down payment, your Ie I fees and out-of-pocket expenses, any money deducted by the mortgagee from the advance of mortgage proceeds and the Land Transfer Tax.

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