Ontario Land Transfer Tax 2024
Ontario Flag What is land transfer tax?
When buying a home, many people overlook the significant cost of land transfer tax. When you acquire a property (and the land it rests on), you must pay a tax to the government after the transaction closes. The amount paid depends on the value of your property.
Our calculator shows you how much you can expect to pay and why. The Land Transfer Tax cost will be uniform accross Ontario except for Toronto and Toronto's surrounding regions including North York, Etobicoke and Scarborough. See below for more details.
Ontario Land Transfer Tax Calculator
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Comparison of Ontario Land Transfer Taxes with Other Provinces
History of the Ontario Land Transfer Tax
Introduced to Ontario in 1974, the Conservative Ontario Government presented the provincial Land Transfer Tax to property buyers with a starting percentage of 0.3% for up to $35,000 of the purchase price of property and 0.6% for the rest. In 2008, a municipal Land Transfer Tax was introduced in addition to the provincial one to home buyers in Toronto and a Non-Resident Speculation Tax became effective for the Greater Golden Horseshoe Region in 2017. Ontario’s Land Transfer Tax rates were last updated in 2017. Land transfer tax rates in Ontario aren’t changed often. When Ontario land transfer tax rates were last updated in 2017, it was the first update in 20 years since 1997.
Ontario Land Transfer Tax Rates
| Purchase Price of Home | Land Transfer Marginal Tax Fee |
|---|---|
| First $55,000 | 0.5% |
| $55,000 to $250,000 | 1.0% |
| $250,000 to $400,000 | 1.5% |
| $400,000 to $2,000,000 | 2.0% |
| Over $2,000,000 | 2.5% |
Ontario Land Transfer Tax Rebates
| Purchase Price of Home | First-Time Buyer Rebate |
|---|---|
| Up to $368,333 | Full Tax Refund |
| Over $368,333 | $4,000 Refund |
Ontario’s First-Time Home Buyer Land Transfer Tax Refund
Land transfer tax can be a significant burden for home buyers, especially for first-time home buyers in Ontario. To offset the negative effects of the large amount of tax, the government doubled the refund for first-time home buyers in 2017. For move-ins that occurred prior to 2017, the refund returns the full value of the tax up to a maximum of $2,000. For move-ins after 2017, the buyer would be exempt from paying tax on the first $368,000 of the purchase price and can receive $4,000 on the remainder.
Who qualifies as a first time home buyer in Ontario?
To qualify as a first time home buyer in Ontario:
- You must be at least 18 years of age.
- You must be a Canadian citizen or permanent resident.
- You must occupy the property as your principal residence.
- You cannot have owned a home, or a stake in a home, anywhere in the world, at any time.
- Your spouse/common-law partner cannot have owned a home while they were your partner.
A spouse can include a person that you are not married to but have lived together for at least three years, have a common-law relationship, or if you and that person are parents of a child. You must apply for the refund within 18 months of purchasing the property.
What if one purchaser is a first-time home buyer and the other is not?
You can still receive the land transfer tax refund even if one or more purchasers are not first-time home buyers, but the amount that you can receive will be partially reduced. For example, if there are two purchasers and one purchaser is a first-time homebuyer, then the first-time homebuyer can claim 50% of the land transfer tax refund.
Example of a partial land transfer tax refund for a parent and child
A parent and a child are purchasing a $500,000 home in Ottawa. The child is a first-time homebuyer, but the parent isn’t. This means that only the child can claim the tax refund, and the refund will be for 50% of their eligible amount.
The Ontario land transfer tax for a home purchased for $500,000 in Ottawa is $6,475. The maximum tax refund is $4,000 as the property is over $368,000. However, the child will only receive 50% of this amount, or $2,000. The parent will receive no tax refund.
The total Ontario land transfer tax would be $6,475 - $2,000 = $4,475
In other words, the parent will be paying their full share of the land transfer tax, while the child’s portion of their interest in the home will be reduced by the tax refund amount.
The amount the parent will pay in land transfer tax would be ($6,475/2) - $0 = $3,237.50
The amount the child will pay in land transfer tax would be ($6,475/2) - $2,000 = $1,237.50
Example of a partial land transfer tax refund for a spouse
A first-time homebuyer is purchasing a home with their spouse, but their spouse has already been a previous homeowner before they became their spouse. In this case, the first-time homebuyer can claim the entire tax refund amount, including the spouse’s share, if the spouse is a Canadian citizen or permanent resident within 18 months of purchasing this home if they aren’t already.
If they were to purchase a home for $400,000 in Thunder Bay, the land transfer tax before the refund would be $4,475. The first-time homebuyer will be able to claim the entire amount of the tax refund, which would be $4,000. After the refund, the total land transfer tax to be paid would be $475.
Further examples of a partial land transfer tax refund
If you are spouses, then you can claim 100% of the tax refund amount if one of you is eligible and have not owned a home together. If you are not spouses, you can only claim your share of the home purchase.
- One first-time home buyer only: 100% of the maximum tax refund
- Two spouses: 100% of the maximum tax refund
- Two non-spouses: 50% of the maximum tax refund for each first-time homebuyer
- Three non-spouses: 33% of the maximum tax refund for each first-time homebuyer
How do I apply for the Ontario First-Time Home Buyer Land Transfer Tax Refund?
You can claim the first-time homebuyer refund at the time that your property is being registered, or you can claim the refund at a later date. If you are claiming the refund at registration, your real estate lawyer can claim the refund electronically if they are registering your property through Ontario's electronic land registration system.
If your property is being registered through paper forms, your refund can be claimed at a land registry office by submitting the following documents:
- Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes
- Ontario Land Transfer Tax Affidavit
- Transfer/Deed
The tax refund will reduce the amount of land transfer tax payable. If you are currently not eligible for the refund, but plan on becoming eligible and claiming the refund at a later date, you will need to pay the entire amount of the land transfer tax at registration. When claiming the refund at a later date, which will need to be within 18 months, you will need to make a refund claim directly to the Ontario Ministry of Finance. You will need to present the same documents as above, along with:
- Agreement of Purchase and Sale
- Proof of Occupancy (Bills, Credit Card Statements, ID)
- Proof of Citizenship or Permanent Residence
Toronto Land Transfer Tax
Toronto currently has the highest Land Transfer Tax rates in Canada. Since 1974, the cost grew seven times faster than the increase in house prices themselves and now cost an average of $20,000. On top of the provincial tax, Toronto home buyers within the area encircled by Etobicoke, Steeles Avenue, Scarborough, and Lake Ontario also have to pay a municipal tax that is equal to the Ontario tax rates. To account for the additional cost to Toronto homebuyers, first-time home buyers in Toronto can receive a rebate of up to $4,475.
Do you pay double land transfer tax in Toronto?
Toronto is the only city in Ontario to have a municipal land transfer tax. Neighbouring cities, such as Mississauga, Brampton, Vaughan, and Markham do not have a municipal land transfer tax, and only have to pay the provincial land transfer tax. If you were to purchase a home in Toronto’s housing market, you will pay double the land transfer tax compared to someone purchasing a home anywhere else in the province before rebates, such as in Mississauga or Ottawa.
Toronto First-Time Home Buyer Land Transfer Tax Refund
First-time homebuyers looking to purchase a home in Toronto can receive a land transfer tax refund of up to $4,475.00. For more information about land transfer rebate opportunities, including property tax relief programs, visit our Toronto land transfer tax page.
Non-Resident Speculation Tax in Ontario
2022 Update: On April 7th, the Canadian federal government announced a ban on foreign homebuyers with the 2022 budget. The ban will last for two years but may be extended depending on Canadian real estate affordability. This means foreign buyers are ineligible to purchase Canadian residential real estate until 2024. However, refugees, international students, and non-citizens with work permits are exempt from this policy.
This announcement supersedes any provincial, non-resident speculation tax as non-residents can no longer purchase residential properties in any Canadian province. However, it is expected the NRST will remain after the federal ban is lifted. The following paragraphs explain the likely case for non-residents when the federal government allows foreign investment again.
The Non-Resident Speculation Tax (NRST) is a 25% tax payable by home buyers who are not citizens or permanent residents of Canada or are foreign corporations or trustees if they purchase a property in Ontario. The NRST applies to residential property which contains at least one and not more than six single family residences. While the ban on foreign investment eclipses NRST, it will apply again when the federal government welcomes foreign investment.
Effective March 30, 2022, the NRST has expanded to cover all of Ontario. This means non-residents will need to pay the additional tax when purchasing a property in the province. Additionally, the tax was increased from 15% to 20% on March 30, 2022. A further tax increase pushed the NRST from 20% to 25% effective October 25, 2022.
The Non-Resident Speculation Tax does not replace the Ontario land transfer tax. You will need to pay both the Non-Resident Speculation Tax and Ontario land transfer tax if you are a foreign national.
What cities in Ontario are subject to the Non-Resident Speculation Tax?
All cities within Ontario are now subject to the Non-Resident Speculation Tax (NRST). Before March 30th, 2022, the tax only applied to cities in the Greater Golden Horseshoe Region. This is the area surrounding Lake Ontario and close to Toronto.
Who has to pay the Non-Resident Speculation Tax?
Homebuyers that are not Canadian citizens or permanent residents will need to pay the NRST. This includes foreign corporations that are based in another country and Canadian corporations that are controlled by a foreign national or foreign corporation.
The Non-Resident Speculation Tax is charged if one purchaser is a foreign national, even if all other purchasers are Canadian citizens or permanent residents.
For example, three homebuyers are looking to buy a $500,000 home in Toronto. Two of the purchasers are Canadian citizens, but one of them is a foreign national. The 25% NRST will be applied to the whole purchase price. This would equal $125,000.
What properties are exempt from the Non-Resident Speculation Tax?
Homebuyers, including foreign nationals, looking to purchase the following properties will not need to pay the Non-Resident Speculation Tax:
- Multi-residential rental property with more than six units
- Agricultural land
- Commercial land
- Industrial land
Foreign nationals that purchase land in Ontario that is not residential will be exempt from this tax.
If I buy more than six condo units, do I still need to pay the tax?
Yes, you will still need to pay the Non-Resident Speculation Tax even if you purchase more than six units in a condominium. That’s because each condo unit is considered to be a single family residence. In order to be exempt from this foreign homebuyer tax, you will need to purchase a building that has more than six units.
Who doesn’t have to pay the NRST?
There are exemptions to the NRST. For example, if you are a foreign national and your spouse is a Canadian citizen or permanent resident, then you will be exempt from the NRST. If you are not spouses and you purchase together, then the NRST will be charged.
You can also be exempt if you are a refugee or have applied to become a permanent resident.
Non-Resident Speculation Tax Rebate
You may qualify for a NRST rebate if:
- If you work full-time for at least one year after purchasing your home
- If you are an international student that is enrolled full-time in post-secondary education for at least two years
- If you become a permanent resident within four years
When did the Non-Resident Speculation Tax start?
The Non-Resident Speculation Tax went into effect on April 21, 2017.
Visit our Canada Land Transfer Tax page to find out more information about land transfer and other taxes across Canada.
Historical Ontario Land Transfer Tax Rates
Changes to Ontario’s land transfer tax rates are infrequent, and they have generally been increases to Ontario land transfer tax brackets.
Land Transfer Tax Rate
| Date | Up to $55,000 | Over $55,000 | Over $250,000 | Over $400,000 | Over $2,000,000 |
|---|---|---|---|---|---|
| 1986 | 0.5% | 1% | 1.5% | 1.5% | 1.5% |
| 1989 | 0.5% | 1% | 1.5% | 2% | 2% |
| 1997 | 0.5% | 1% | 1.5% | 2% | 2% |
| 2017 | 0.5% | 1% | 1.5% | 2% | 2.5% |
Who pays land transfer tax in Ontario?
The buyer of a home will pay the land transfer tax, not the seller of a home. Ontario home buyers should budget for the land transfer tax as part of their closing costs when purchasing a home, which can include costs of getting a mortgage. While land transfer tax makes up most of the closing costs for buyers, other closing costs include legal fees, registration fees, and home inspection fees. To calculate how much land transfer tax you will need to pay, use the Ontario land transfer tax calculator at the top of this page.
There are ways that the land transfer tax can be avoided. For example, there is no land transfer tax between family members in Ontario if the property is gifted and no payment was made for the property.
How do you pay land transfer tax in Ontario?
Land transfer tax is paid during closing through your lawyer. If your lawyer chooses to electronically register your property, Ontario's electronic land registration system will calculate the land transfer tax payable, after any rebates and exemptions. Your property can also be registered in-person at a land registry office.
If you happen to have overpaid your land transfer tax, such as if you now qualify for a rebate or exemption, then you may claim a refund from the Ministry of Finance. You can also pre-pay land transfer tax before your property is registered.