- Land Transfer Tax -
Land Transfer Tax (LTT) is a tax that must be paid by the
purchaser of any house or condominium in Ontario. It is directly
based on the purchase price of the home. LTT must be paid
before the deed can be registered, showing the purchaser as the
new owner. Your lawyer will pay this amount on the Closing
Day on your behalf, from funds you have provided.
You will not have to pay Land Transfer Tax if you are a first-time
buyer of a new home. You are currently exempt from
LTT if you meet these conditions. Your lawyer will provide
you with the necessary form to ensure you this exemption.
You will qualify for an LTT rebate if you have a Registered
Home Ownership Savings Plan (RHOSP) that was opened at a
financial institution before 1994. Your lawyer will assist
you in completing the proper forms to obtain the rebate.
You will still need to budget for the LTT payment on the Closing
Date, however you can expect to receive your rebate cheque from
the provincial government within several weeks after closing.
How to calculate the Land Transfer Tax?
The amount of LTT to be paid is based on the purchase price
of the home. If the purchase price is less than $400,000.;
LTT is calculated as 0.5% of the first $55,000. ($275) plus 1% of
the remainder.
An easier way to calculate Land Transfer Tax is to
take 1% of the purchase price and subtract $275.:
(Example: Purchase Price $100,000.00...1%
of the purchase price is $1,000. minus $275. for an LTT of $725.)
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