As a followup to my blog the other day with more information on the changes to the Land Transfer Tax rebate in Ontario, this blog explains what the tax is and how it is calculated on the purchase of your home.
The best kinds of dreams are the ones floating right in front of you. The worst kinds of dreams are the ones that end as soon as you wake up. While it may not cause your home ownership dreams to come to an end, discussing things like Land Transfer Tax will have you floating back to reality in no time.
In an attempt to help you get back to your dreams of walk-in closets and luxurious living spaces, we have summarized the most important Land Transfer Tax facts you need to know so you can get back to the dream world as soon as possible.
What is Land Transfer Tax?
This is the tax you pay when you buy land or an interest in land in Ontario. This includes any buildings, buildings to be constructed, and fixtures.
Who Pays Land Transfer Tax?
Once the transaction closes, the buyer is responsible for paying the land transfer tax.
What are the Land Transfer Tax Rates?
- 5% up to and including $55,000
- 1% above $55,000 up to and including $250,000
- 5% above $250,000
- 2% above $400,000 where the land contains one or two single family residences.
Do I Pay Land Transfer Tax as a First Time Buyer?
You are still required to pay the land transfer tax as a first time buyer however, you may be eligible for a refund of all or part of the land transfer tax. You can find out what rebates you are eligible for on your provincial government website.
Land Transfer Tax for First-Time Buyers:
NEW in Ontario! As of January 1, 2017, the Ontario government is doubling the tax break for eligible purchases from $2,000 to $4,000. This means that there will be no land transfer tax on the first $368,000 on the cost of a home, benefiting more than half of all first-time home buyers who will not have to pay any provincial land transfer tax. As a first-time buyer, you are eligible for many other benefits, and the best way to learn about them is through the advice of a trusted REALTOR. Whether it’s a quick question or you are ready to begin your home buying journey, getting started is a click away with the button below.
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