{"id":311983,"date":"2025-09-12T15:31:14","date_gmt":"2025-09-12T19:31:14","guid":{"rendered":"https:\/\/wahi.com\/ca\/en\/?post_type=glossary&p=311983"},"modified":"2025-09-12T15:31:14","modified_gmt":"2025-09-12T19:31:14","slug":"what-is-a-land-transfer-tax-in-canada","status":"publish","type":"glossary","link":"https:\/\/wahi.com\/ca\/en\/glossary\/land-transfer-tax","title":{"rendered":"What is a Land Transfer Tax in Canada?"},"content":{"rendered":"

[et_pb_section fb_built=”1″ admin_label=”Top Section” _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”0px||3px|||” da_disable_devices=”off|off|off” locked=”off” collapsed=”on” global_colors_info=”{}” theme_builder_area=”post_content” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” width=”95%” max_width=”100%” custom_margin=”||-24px||false|false” custom_padding=”55px||||false|false” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][wahi_breadcrumb _builder_version=”4.24.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][wahi_breadcrumb-link title=”Glossary” _builder_version=”4.24.2″ _dynamic_attributes=”link_option_url” _module_preset=”default” custom_margin=”||0px||false|false” link_option_url=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF9saW5rX3VybF9wYWdlIiwic2V0dGluZ3MiOnsicG9zdF9pZCI6IjMwMzMzOSJ9fQ==@” custom_css_main_element=”margin-bottom: 0px !important;” global_colors_info=”{}” theme_builder_area=”post_content”][\/wahi_breadcrumb-link][wahi_breadcrumb-link title=”@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IiIsImFmdGVyIjoiIn19@” _builder_version=”4.24.2″ _dynamic_attributes=”title” _module_preset=”default” module_text_color=”#686E6E” custom_margin=”||0px||false|false” global_colors_info=”{}” theme_builder_area=”post_content”][\/wahi_breadcrumb-link][\/wahi_breadcrumb][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”16px||4px|||” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_text _builder_version=”4.18.0″ _dynamic_attributes=”content” _module_preset=”default” header_font_size=”3.5rem” header_line_height=”4.5rem” header_font_size_tablet=”42px” header_font_size_phone=”2rem” header_font_size_last_edited=”on|phone” header_line_height_tablet=”4.5rem” header_line_height_phone=”2.75rem” header_line_height_last_edited=”on|desktop” global_colors_info=”{}” theme_builder_area=”post_content”]@ET-DC@eyJkeW5hbWljIjp0cnVlLCJjb250ZW50IjoicG9zdF90aXRsZSIsInNldHRpbmdzIjp7ImJlZm9yZSI6IjxoMT4iLCJhZnRlciI6IjwvaDE+In19@[\/et_pb_text][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”1px||1px|||” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][wahi_socialsharing _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][\/wahi_socialsharing][\/et_pb_column][\/et_pb_row][et_pb_row _builder_version=”4.18.0″ _module_preset=”default” custom_padding=”15px||0px|||” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.18.0″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” hover_enabled=”0″ text_font_size_tablet=”21px” text_font_size_phone=”16px” text_font_size_last_edited=”on|desktop” header_2_font_size_tablet=”36px” header_2_font_size_phone=”25px” header_2_font_size_last_edited=”on|phone” locked=”off” global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n

Here we explain what this tax is, who pays it, how it\u2019s calculated and more.<\/p>\n

[\/et_pb_text][\/et_pb_column][\/et_pb_row][\/et_pb_section][et_pb_section fb_built=”1″ _builder_version=”4.24.2″ _module_preset=”default” da_disable_devices=”off|off|off” global_colors_info=”{}” theme_builder_area=”post_content” da_is_popup=”off” da_exit_intent=”off” da_has_close=”on” da_alt_close=”off” da_dark_close=”off” da_not_modal=”on” da_is_singular=”off” da_with_loader=”off” da_has_shadow=”on”][et_pb_row _builder_version=”4.24.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_column type=”4_4″ _builder_version=”4.24.2″ _module_preset=”default” global_colors_info=”{}” theme_builder_area=”post_content”][et_pb_image src=”https:\/\/wahi.com\/wp-content\/uploads\/2025\/09\/How-much-is-land-transfer-tax-in-Ontario-.jpg” alt=”What is a Land Transfer Tax in Canada?” title_text=”How-much-is-land-transfer-tax-in-Ontario-” _builder_version=”4.27.4″ _module_preset=”default” hover_enabled=”0″ global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″][\/et_pb_image][et_pb_text _builder_version=”4.27.4″ _module_preset=”default” text_font_size=”21px” text_line_height=”1.6em” header_2_font=”||||||||” header_2_font_size=”36px” header_2_line_height=”1.3em” header_3_font_size=”1.25rem” header_3_line_height=”1.88rem” header_4_font=”|700|||||||” header_4_font_size=”1.25rem” header_4_line_height=”1.88rem” custom_padding=”||0px|||” hover_enabled=”0″ text_font_size_tablet=”21px” text_font_size_phone=”16px” text_font_size_last_edited=”on|phone” header_2_font_size_tablet=”36px” header_2_font_size_phone=”25px” header_2_font_size_last_edited=”on|phone” locked=”off” global_colors_info=”{}” theme_builder_area=”post_content” sticky_enabled=”0″]<\/p>\n

Land Transfer Tax is a tax that governments in Canada levy when ownership of a property changes from one owner to another.<\/span><\/p>\n

 <\/p>\n

Purpose of Land Transfer Tax<\/b><\/h2>\n

Land transfer tax is a provincial tax levied when purchasing a property in Ontario. It serves as a significant revenue source for the provincial government, funding various public services and infrastructure projects.<\/span><\/p>\n

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Basis for Calculation<\/b><\/h2>\n

The tax is calculated based on the property’s purchase price or, in certain cases, its fair market value at the time of transfer.<\/span><\/span><\/p>\n

\u00a0<\/span><\/p>\n

Authorities That Collect Land Transfer Tax<\/b><\/h2>\n

In Ontario, the provincial government collects the land transfer tax. Additionally, municipalities like Toronto impose their own municipal land transfer tax (MLTT) on property transactions within their jurisdiction.<\/span><\/span><\/p>\n

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Who Pays the Land Transfer Tax<\/b><\/h2>\n

The buyer is responsible for paying both the provincial and, if applicable, the municipal land transfer taxes at the time of property transfer.<\/span><\/span><\/p>\n

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Property Types Covered<\/b><\/h2>\n

Land transfer tax applies to various property types, including: residential homes; commercial buildings; vacant land; unfinished structures; and fixtures and any stake or interest in the land or its improvements.<\/span><\/span><\/p>\n

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How the Tax is Calculated<\/b><\/h2>\n

Example: Provincial Land Transfer Tax (Ontario)<\/em>
Ontario’s land transfer tax is calculated using a graduated scale:<\/span><\/p>\n

    \n
  • Up to $55,000: 0.5%<\/span><\/li>\n
  • $55,000.01 to $250,000: 1.0%<\/span><\/li>\n
  • $250,000.01 to $400,000: 1.5%<\/span><\/li>\n
  • $400,000.01 to $2,000,000: 2.0%<\/span><\/li>\n
  • Over $2,000,000: 2.5%<\/span><\/li>\n<\/ul>\n

    \u00a0<\/span><\/p>\n

    Municipal Land Transfer Tax (Example: Toronto)<\/b><\/h2>\n

    Toronto imposes an additional MLTT on properties purchased within the city:<\/span><\/p>\n

      \n
    • Up to $55,000: 0.5%<\/span><\/li>\n
    • $55,000.01 to $250,000: 1.0%<\/span><\/li>\n
    • $250,000.01 to $400,000: 1.5%<\/span><\/li>\n
    • $400,000.01 to $2,000,000: 2.0%<\/span><\/li>\n
    • Over $2,000,000: 2.5%<\/span><\/li>\n
    • Over $3,000,000 and up to $4,000,000: 3.5%<\/span><\/li>\n
    • Over $4,000,000 and up to $5,000,000: 4.5%<\/span><\/li>\n
    • Over $5,000,000 and up to $10,000,000: 5.5%<\/span><\/li>\n
    • Over $10,000,000 and up to $20,000,000: 6.5%<\/span><\/li>\n
    • Over $20,000,000: 7.5%
      <\/span><\/li>\n<\/ul>\n

      \u00a0<\/span><\/p>\n

      Items Included in the Value for Tax<\/b><\/h2>\n

      The land transfer tax is typically calculated based on the property’s purchase price. However, in certain situations, the tax may also include:<\/p>\n

        \n
      • Assumed liabilities<\/li>\n
      • Benefits provided to the seller<\/li>\n
      • Soft costs<\/li>\n
      • Costs of improvements or upgrades<\/li>\n<\/ul>\n

        \u00a0<\/span><\/p>\n

        Using Fair Market Value<\/b><\/h2>\n

        In specific cases, such as long-term leases exceeding 50 years or transfers between corporations and shareholders, the land transfer tax may be calculated based on the property’s fair market value instead of the sale price.<\/span><\/p>\n

        \u00a0<\/span><\/p>\n

        Exemptions<\/b><\/h2>\n

        Certain exemptions may apply to land transfer tax, including:<\/span><\/p>\n

          \n
        • Transfers between spouses<\/span><\/li>\n
        • Transfers to or from a corporation or its shareholders<\/span><\/li>\n
        • Transfers involving certain types of trusts<\/span><\/span><\/li>\n<\/ul>\n

          These exemptions are subject to specific criteria and should be verified with legal counsel or the appropriate authorities.<\/span><\/span><\/span><\/p>\n

          \u00a0<\/span><\/p>\n

          First-Time Homebuyer Rebates<\/b><\/h2>\n

          Ontario offers a land transfer tax rebate for first-time homebuyers:<\/span><\/p>\n

            \n
          • Maximum rebate: Up to $4,000<\/span><\/li>\n
          • Eligibility: Must be a Canadian citizen or permanent resident and have never owned a home or an interest in a home anywhere in the world
            <\/span><\/li>\n<\/ul>\n

            In Toronto, first-time homebuyers may also qualify for a municipal rebate:<\/span><\/p>\n

              \n
            • Maximum rebate: Up to $4,475<\/span><\/li>\n
            • Eligibility: Must meet the same criteria as the provincial rebate and purchase a home within Toronto
              <\/span><\/li>\n<\/ul>\n

              \u00a0<\/span><\/p>\n

              Role as a Closing Cost<\/b><\/h2>\n

              Land transfer tax is a mandatory closing cost that buyers must pay on or before the property’s closing date. It cannot be included in the mortgage amount and should be budgeted for accordingly.<\/span><\/p>\n

              \u00a0<\/span><\/p>\n

              Provincial and Municipal Variations<\/b><\/h2>\n

              Each province and municipality in Canada may have different land transfer tax rates and structures. For instance, Alberta and Saskatchewan do not charge land transfer tax, while Ontario and Toronto have their own respective rates and rules.<\/span><\/span><\/p>\n

              \u00a0<\/span><\/p>\n

              Planning and Compliance<\/b><\/h2>\n

              Understanding the land transfer tax rules is crucial for buyers to accurately estimate the total cost of purchasing a property and ensure compliance with all tax obligations.<\/span><\/p>\n

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