Toronto Real Estate | Ontario Closing Costs | Land Transfer Tax Explained

If you are buying a Home or Condo in most large Canadian centres,  Land Transfer Taxes can be added to your list of closing costs.

Unless you live in Alberta, Saskatchewan, or rural Nova Scotia, land transfer taxes (or property purchase tax) are a basic fact of life. These taxes, levied on properties that are changing hands, are the responsibility of the purchaser. Depending on where you live, taxes can range from a half a per cent to two per cent of the total value of the property.

Many provinces have multi-tiered taxation systems that can prove complicated. If you purchase a property for $260,000 in Ontario, for example, .5 per cent is charged on the first $55,000, 1 per cent is charged on $55,000 - $250,000, while the $250,000 - $400,000 range is taxed at 1.5 per cent. Your total tax bill? $2,375.00.

The following chart illustrates Land Transfer Taxes for Ontario.

ONTARIO
Land Transfer Tax (click here to go directly to calculator )

Up to $55,000X .5 % of total property value

From $55,000 to $250,000 X 1 % of total property value

From $250,000 to $400,000 X 1.5 % of total property value

From $400,000 up X 2 % of total property value

More information on Ontario land transfer tax may be found by clicking here.

CITY OF TORONTO BUYERS ONLY

Please note that if you are a buyer in the City of Toronto (416 area code), you will be subject to an additional new City of Toronto land transfer tax for any real estate purchase made in 2008 onwards.  There is however, an exemption for first time buyers buying residential real estate up to a purchase price of $400,000. The additional City of Toronto tax is calculated as follows:

Up to $55,000 X .5 % of total property value

From $55,000 to $400,000 X 1 % of total property value

From $400,000 up X 2 % of total property value

As mentioned above, the City of Toronto Tax does not affect buyers in the (905) area code. 

READ MORE ABOUT THE CITY OF TORONTO LAND TRANSFER TAX AND MY OPINION OF ITS IMPACT ON TORONTO'S REAL ESTATE MARKET IN MY BLOG BY CLICKING HERE 

Additional external information on the City of Toronto land transfer tax may be found by clicking here.