Toronto Land Transfer Tax Calculator
How to Use Our Toronto Land Transfer Tax Calculator
Using our simple and easy-to-use Toronto Land Transfer Tax Calculator (and all of Canada), you’ll know exactly what your largest closing cost will be when buying a home. And to help you to potentially lower it, below are details on how to qualify for certain rebates.
A few important notes on what each field and toggle on our nesto calculator means:
Asking Price – The purchase price of the property.
Down Payment – The percentage of your home you’ll pay upfront.
Province & City – Where your property is located.
First-time Home Buyer – Select ‘Yes’ if you have never owned a home in Canada.
Owner Occupied – Select ‘Yes’ if you will be occupying the property.
New Construction -Select ‘Yes’ if you are building a new building on the land.
Note: Unlike other federal programs that involve the term ‘First-time Home Buyer’, for the Land Transfer Tax Rebate—you can only qualify for this once in your lifetime. Source: Ontario.ca
Once you enter in all the above info, our Land Transfer Tax Calculator for Toronto will automatically calculate your total Land Transfer Tax.
How Much is Land Transfer Tax in Toronto
Land transfer tax (LTT) is based on the purchase price of your property. The higher the price the more LTT you will pay. Below is a chart showing how much land transfer tax you can pay.
As you can see, since Toronto’s land transfer tax is based on a marginal tax system, the higher the price of the property, the higher overall tax.
Toronto’s Land Transfer Tax System
The Ontario provincial government will charge you this amount, plus the Toronto municipality—effectively taxing you twice.
The good thing is both the provincial government and the Toronto municipality will offer land transfer tax rebates up to $4,000 and $4,750, respectively—if you qualify as a first-time home buyer.
Breakdown of Toronto Land Transfer Tax Rates
Using a simple visual chart below, you can see the visual breakdown of the marginal tax rates used by both the provincial (Ontario) and municipal (Toronto) governments.
To help put these rates into a modern cost scenario, below is an example of the land transfer tax in Toronto.
Toronto Land Transfer Tax Example ($800K purchase price)
Let’s say, you want to purchase a home in Toronto worth $800,000.
Using the nesto Landing Transfer Tax (LTT) Calculator for Toronto, the total amount of LTT you can expect to pay is a total of $32,000..
How did we get this number? Let’s do a quick run through:
$800,000 x 2.0% (Municipal: Toronto) = $16,000
$800,000 x 2.0% (Province: Ontario) = $16,000
Add Municipal ($16,000) + Province ($16,000) = $32,000 Total Land Transfer Tax
Let’s say you decide to purchase a home in Toronto with the same purchase price of $800,000, except this time you also qualify for the first-time home buyer’s rebate.
The total land transfer taxes still amounts to $32,0000; however, since you qualify as a first-time home buyer, both the provincial and the municipal governments will each give you a maximum total rebate of $8,750 ($4,000 from the province and $4,750 from municipality).
After applying the rebates, the net land transfer tax owing amounts to $23,350.
This can be calculated as follows:
(Land Transfer Tax Total: $32,000) – (First Time Home Buyer Rebate: $8, 750) = $23,250
To qualify for the First-time Home Buyer’s Rebate Ontario.ca states:
- The purchaser must be at least 18 years old.
- The purchaser must occupy the home as their principal residence within nine months of the date of transfer.
- The purchaser cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, at any time.
- If the purchaser entered into an agreement of purchase and sale before December 14, 2007, the home must be a newly constructed home and the purchaser must be eligible for the Tarion New Home Warranty.
- If the purchaser has a spouse, the spouse cannot have owned an eligible home, or had any ownership interest in an eligible home, anywhere in the world, while he or she was the purchaser’s spouse. If this is the case, no refund is available to either spouse.
- Eligibility for the first-time homebuyers refund program is restricted to Canadian citizens and permanent residents of Canada.
Note: The first-time home buyers rebate is available to qualifying persons in British Columbia, Ontario, and P.E.I.
How has Toronto Land Transfer Tax Changed Over Time?
The purpose of the land transfer tax has been to generate more tax revenue for they city. And, as housing prices has risen, so has the marginal tax rates.
Here’s a comparison chart of the tax rate since 1974, compared to today.
Comparison of Growth of Marginal Tax Rates
In 2008, the Toronto municipality levied its own land transfer tax, in addition to the existing provincial land transfer tax. Consequently, this led to a home purchase in Toronto and surrounding areas (North York, Etobicoke and Scarborough).
This instant doubling of Toronto land transfer tax makes purchasers of Toronto property the highest in the country.
While the Toronto land transfer taxes are the highest in the country, you can take advantage of double the tax rebates. If you qualify as a first-time home buyer, you get both a provincial tax rebate and a municipal tax rebate.
What is the Non-Resident Speculation Tax?
With Canada’s red hot housing market, affordable housing for many Canadians has become a problem. This is the case for two of the hottest markets in Canada: Ontario and British Columbia.
Pockets within these provinces are experiencing a housing shortage and a decrease in rental availability, all due to speculative foreign investment.
To slow the purchase by foreign nationals, these provinces now have in place a speculative tax.
In Ontario, it’s called the ‘non-resident speculative tax.’ And in British Columbia, it’s called the ‘speculation tax.’ And both operate in a similar fashion.
In Ontario, if a foreign national purchases property they’ll have to pay an additional 20% tax on the purchase price. As you can imagine, the total closing costs for a foreign national in Ontario on an $800,000 property can easily amount to more than an additional $180,000 (non-resident speculative tax, plus land transfer taxes).
Frequently Asked Questions (FAQ)
When was Toronto’s Municipal Land Transfer Tax introduced?
The Toronto’s Municipal Land Transfer tax was introduced in 2007 and then implemented in 2008. This LTT came about because of the city’s structural deficit. It helps the city to fund city projects from transit to housing.
Will You Need to Pay Toronto Land Transfer Tax When Buying a Condo?
Yes, any property on the land purchased is used in calculating the total purchase price. And the marginal tax rates are based on the total purchase price.
How can you pay Toronto’s Land Transfer Tax?
As this is part of your closing costs, your real estate lawyer will handle it for you. It will be added to the rest of your closing costs. If it is not added to your closing costs, you’ll receive an invoice and it is to be paid immediately, as a one-time payment.
How do I avoid land transfer tax in Toronto?
Unfortunately, there is currently no way to avoid paying land transfer tax in Toronto. Ontario implements a legal precedent on existing methods to dodge any land transfer taxes. The best that you can do is use the land transfer tax rebates available to you.
When is Toronto Land Transfer Tax to be paid?
Once a Toronto Land Transfer Tax is complete, you will have 30 days to pay. If you don’t pay within 30 days then you will have to send in a Return on the Acquisition of a Beneficial Interest in Land form, along with the payment of tax within 30 days after the closing date.
Purchasing your dream home will likely be your largest expense in your lifetime. And among all the closing costs, the land transfer tax takes the cake as the biggest closing expense.
This is especially true when purchasing a property in Toronto and surrounding cities, where you’ll have to pay double the land transfer tax.
While you can’t avoid this land transfer tax in Ontario, you can prepare for it, by using nesto’s land transfer tax calculator that takes into consideration your given situation.
And if you qualify as a first-time home buyer, you can even get a maximum rebate of $4,000 from the Ontario government and $4,750 from the Toronto municipality.
Remember you’ll only be able to use this rebate once in your lifetime.Your time is precious. At nesto, we think it’s highly unfair (not to mention super tedious) to have to constantly shop for the lowest rate on what likely will be your biggest expense in your lifetime—your mortgage.
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