Land Transfer Tax

When you buy a new or used residential property in Toronto, you are obliged to pay Municipal and Provincial Land Transfer Tax upon closing. These taxes will be payable when you transfer an interest to someone else be it a sibling or friend.

Recently clients wishing to change the number of the owners from 3 to 2 family members find that they have to pay taxes on 1/3 of the remaining outstanding mortgage

Some exemptions will be:
certain transfers between spouses
certain transfers from an individual to their family business corporation
certain transfers of farmed land between family members
certain transfers of a life lease from a non-profit organization or a charity.

Here is a LTT calculator from the Toronto Real Estate Board http://www.torontorealestateboard.com/buying/LTT_calculator/ltt_calculator.htm

Please check prior to making any final decisions about transfering property.

Land Transfer Taxes & Tax Refunds (Toronto and Ontario)

Land Transfer Tax Refund for First-time Homebuyers

Ontario

http://www.rev.gov.on.ca/en/refund/newhome/index.html

Land Transfer Tax applies to all transfers of land in Ontario.

First-time homebuyers may be eligible for a refund of all or part of the tax. For transfers where: the agreement of purchase and sale was entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.

Applications for a refund must be made within 18 months after the date of the transfer.

The maximum amount of the refund is $2,000. The refund can be requested at the sale or directly from the Ministry of Finance. No interest is paid on this refund.
(For Toronto, the maximum refund is $3,725.00)

http://www.toronto.ca/taxes/mltt.htm#rebates

To claim a refund, you:

• must be at least 18 years of age;
• must occupy the home as your principal residence within 9 months of the date of transfer; and
• You and your spouse cannot have ever owned a home, or an interest in a home, anywhere in the world.

Ontario Land Transfer /Toronto (in bold) Formula

0.5% of the value of consideration for the transfer up to and including $55,000
1% of the value of the consideration which exceeds $55,000 up to and including $250,000 (to 400,000.00 for Toronto)
1.5% of the value of the consideration which exceeds $250,000* Only Ontario
2% of the amount by which the value of the consideration exceeds $400,000 (Toronto)

Example: House for $600,000 in Toronto would have the following transfer taxes

Toronto $7,725.00
Ontario $8,475.00
Total $16,200.00

Note: this is not intended as legal advice, please contact a lawyer for assistance with your residential purchase.

Some Closing Costs to consider for the new purchaser

First Time Home Buyer Purchasing a Resale Home or Condominium

Typical Costs

1. Title Insurance
2. Assignment Fees
3. Ontario/Toronto Land Transfer Taxes
4. Property Taxes
5. Education and Park Levies
6. Utility Hook Up Fees
7. Mortgage Application Fees
8. Property Insurance
9. Inspection
10. Survey
11. Title Insurance
12. Canadian Mortgage and Housing Corporation (CMHC) Mortgage Insurance
(if less than 20% downpayment)
13. Registration of Title
14. Execution Name Searches
15. Registration of Mortgage
16. Costs to Municipality and Utility to find out about outstanding bills
15. Real Estate Commissions
16. Legal Fees
17. Change of mail
18. Utility Hook-Up charges (gas, hydro, phone, cable)

Note: this is not intended as legal advice, please contact a lawyer for assistance with your residential purchase.

Typical Fees

NEW CONDOMINIUM COSTS

• Review Agreement of Purchase and Sale within 10 days of signing. $250.00*

• Legal Services for Purchase of Condo $1,095.00 PLUS HST and Registration of Mortgage and Title, Ontario/Toronto Land Transfer Taxes, Title Insurance

Other Typical Closing Costs

• Disbursements** Survey, Postage, Faxes
Execution Name Searches
• Tarion New Home Warranty
• Property Taxes
• Education and Park Levies,
• Utility Hook Up Fees
• Property Insurance

** Disbursements can vary depending on complexity of issues

RESALE HOUSING COSTS

PURCHASE

• Review Agreement of Purchase and Sale prior to signing. $250.00*

• Legal Services for Purchase of Resale House/Condominium $1,000.00 PLUS HST and Registration of Mortgage and Title, Ontario/Toronto Land Transfer Taxes, Title Insurance, Couriers, Obtaining Status Certificate

Other Typical Closing Costs

• Disbursements** Survey, Couriers, Postage, Faxes, Execution Name
Searches,
• Property Taxes
• Utility Hook Up Fees
• Property Insurance
• Home Inspection

** Disbursements can vary depending on complexity of issues

SALE

Legal Services for Sale of Resale House/Condominium $995 PLUS HST and Registration of Discharge of Mortgage, Couriers

Other Typical Closing Costs

• Disbursements** Couriers, Postage, Faxes, Execution Name
Searches
** Disbursements can vary depending on complexity of issues

MORTGAGE REFINANCING

Legal Services for Mortgage Re-Financing $450 PLUS HST and Registration of Mortgage, Title Insurance, Land Transfer Taxes and Registration of Mortgage

* Disbursements** Couriers, Postage, Faxes, Execution Name
Searches

** Disbursements can vary depending on complexity of issues

Note this is not intended as legal advice. Please contact Prince Law Office for immediate assistance with your residential purchase.