Land Transfer Tax in Ontario
Purchasers in Ontario add Land Transfer Taxes to their list of
closing costs. Land transfer taxes are levied on properties that are changing
hands, are the responsibility of the purchaser.
Many provinces have multi-tiered taxation systems that can prove
complicated. If you purchase a property for $260,000 in Ontario, for
example, 0.5 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
Ontario's Land Transfer Tax:
- Up to $55,000 X 0.5 % of total property value
- From $55,000 to $250,000 X 1 % of total property value, less
$275
- From $250,000 to $400,000 X 1.5 % of total property value,
less $1525
- From $400,000 up X 2 % of total property value, less $ 3525
Additional New Toronto's Land Transfer Tax:
Toronto home buyers will pay additional new tax rates (on
purchase agreements signed after Dec 31, 2007 and close after Feb 1,
2008)
- 0.5% on first $55,000,
- 1% on next $345,000, and
- 2% on portion over $400,000
Exemption: First time buyer do not
pay the new tax on the first $400,000 of a property purchase. More
about
Toronto's
new land transfer tax
Land Transfer Tax Rebate
Land transfer Tax rebate is a permanent program allowing a rebate
of provincial land transfer tax otherwise payable up to $2000 for
all agreement of purchase and sale entered into after March 31, 1999
(being the land transfer tax on a $227,500 home, using above
calculation). As of Dec 14, 2007, resale home buyers are eligible
for Ontario's New Land Transfer Tax Rebate
Eligibility of the buyer:
- must be at least 18 years old
- must be first time home buyer and occupy the home as a
principle residence no later than 9 months after the date of the
conveyance
- must never have owned, or had any ownership interest in, an
eligible home anywhere in the world while he/she was a
purchaser's spouse or same sex partner
Eligibility of the property
- must be newly constructed home
- builder must be registered by TARION warranty corporation
Restrictions on amount claimed:
- between non-spouses: refund is reduced for the proportionate
interest of the co-owner who is not eligible
- between spouses: If one spouse is first time home buyer and
the other owned a home before, but not since becoming a spouse
of the first time home buyer, then the spouse who is the first
time home buyer would claim the whole rebate
Other conditions
- Rebate received on day of registration at land registry
office
- 18 month deadline (from the date that the conveyance is
registered) if applying for refund directly from Land Transfer
Tax office
- Qualifying tax payer or their solicitors may claim an
immediate refund at the time of registration.
For more information on land transfer tax rebate speak to your
real estate lawyer or visit government's revenue website.
Call Amit if you are thinking to buy /sell a resale home or a new
builder apartment in Mississauga.
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