HomeHow much is land transfer tax in Ontario?
The average land transfer tax in Ontario is $14,288 — which is the provincial tax based on the average home price in Canada. It is important to know the key aspects of land transfer tax in Ontario. This includes who is responsible for paying land transfer tax to strategies that will help you avoid paying land transfer tax.
Ontario land transfer tax
When you purchase land in Ontario you will have to pay a provincial land transfer tax that is calculated as a marginal tax based on the purchase price of the home. Land transfer tax in Ontario is always paid by the buyer — this is also true when purchasing a home elsewhere in Canada.
| Purchase Price of Home | Marginal Tax Rate |
|---|---|
| First $55,000 | 0.5% |
| More than $55,000 up to $250,000 | 1% |
| More than $250,000 up to $400,000 | 1.5% |
| More than $400,000 up to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
How to avoid paying land transfer tax in Ontario
There are a few situations in which you can avoid paying land transfer tax in Canada. It is important to consult and expert to know if you are required to pay land transfer tax. Some potential situations that allow for land transfer tax exemptions in Ontario are:
- property transfers betweeen spouses
- property transfers of farmed land between family members
- property transfers to a family business corporation
Land transfer tax rebates in Ontario
There is a first-time home buyer land transfer tax rebate in Ontario which helps reduce the amount of provincial land transfer tax paid when purchasing a home in Ontario. The maximum rebate offered in Ontario is $4,000 which would cover land transfer tax on homes valued up to $368,000 in full.
Ontario land transfer tax example
Let's see how much land transfer tax you would have to pay if you purchased a home in Missisauga Ontario for $750,000. You would have to pay $10,975 in land transfer taxs if your purchased this $750,000 home in Missisauga Ontario.
-
First $55,000
$55,000 home value
x 0.50% tax rate
= $275 land transfer tax
-
More than $55,000 up to $250,000
$195,000 home value
x 1.00% marginal tax rate
= $1,950 land transfer tax
-
More than $250,000 up to $400,000
$150,000 home value
x 1.50% marginal tax rate
= $2,250 land transfer tax
-
More than $400,000 up to $2,000,000
$325,000 home value
x 2.00% marginal tax rate
= $6,500 land transfer tax
-
All tiers
$275 + $1,950 + $2,250 + $6,500
= $10,975 total Ontario land transfer tax
Toronto land transfer tax
Homes purchased in Toronto are subject to municipal land transfer tax (MLTT) in addition to the provincial land transfer tax charged in Ontario. Much like land transfer tax in Ontario — Toronto MLTT is calculated based on the purchase price of the home. It is important to know the rates in Toronto as their land transfer tax brackets vary from Ontario's. It is also important to understand Toronto's rebate rules to ensure you can reduce your land transfer tax cost if possible.
Read more: Toronto Land Transfer Tax Overview
