There are two types of Land Transfer Tax in Ontario: Ontario Land Transfer Tax (for Ontario, as “LTT”) and Municipal Land Transfer Tax (for Toronto, as “MLTT”). Both LTT and MLTT are basically calculated on the amount you paid for the land.
Ontario Land Transfer Tax (LTT)
In general, if you buy land or an interest in land in Ontario, you must pay Ontario's land transfer tax, whether or not your transfer is registered with Ontario's land registry office.
Land includes any buildings, buildings to be constructed, and fixtures (such as light fixtures, built-in appliances and cabinetry).
Land transfer tax is normally calculated on the value you paid for the land, plus the amount remaining on any mortgage or debt assumed as part of the arrangement to buy the land, if any. Land Transfer Tax calculation for a single family residence is different from those for non-single family residence. Single Family Residence is a property containing at least one, and not more than two, single family residences:
In some cases, land transfer tax is based on the fair market value of the land, without counting how much the money you paid, for example, where:
- a lease is made for a land exceed 50 years;
- land is transferred from a corporation to one of its shareholders; or
- and is transferred from individual to a corporation, if shares of the corporation are issued to that individual.
LTT Refund for First-Time Homebuyers
First-time homebuyers may be entitled to a refund of Ontario's land transfer tax, up to a maximum of $2,000. This refund is usually claimed at the time of registration. If not, the refund may be claimed directly from the Ministry of Revenue.
In order to be a First-Time Homebuyer to claim a refund, you:
- must be at least 18 years old;
- must occupy the home as your principle residence within 9 months after the date of transfer; and
- cannot have previously owned a home, or an interest in a home, anywhere in the world.
- In addition, your spouse can not have owned a home, or an interest in a home, anywhere in the world while being your spouse.
If not claimed at the time of registration, refunds must be requested within 18 months of registration.
Our real estate transaction service includes LTT rebate service, the rebate amount is deducted directly from the total tax payment if you are qualified for the rebate.
Municipal Land Transfer Tax (MLTT) and Rebate for Toronto
Effective on February 1, 2008, a Municipal Land Transfer Tax is applied to purchases on land in the city of Toronto in addition to the Province's Land Transfer Tax. You may be eligible for a rebate of the MLTT for a maximum of $3,725.00, if you are a first time home buyer as defined in LTT refund above.