Transfers of Land Between Spouses

Bulletin LTT 1-2012
Published: June 2012
Content last reviewed: June 2012
ISBN: 978-1-4435-8863-8 (Print), 978-1-4435-8865-2 (PDF), 978-1-4435-8864-5 (HTML)

  • This bulletin outlines the application of the Land Transfer Tax Act (Act) to registered conveyances and unregistered dispositions of land between spouses and former spouses.
  • This bulletin contains information about electronic registration which is directed to solicitors.
  • This bulletin provides general information and does not replace the Act and its regulations.

1. Background

1.1. Land Transfer Tax

Subject to certain limited exceptions, land transfer tax is payable on every transfer of land in Ontario based on the value of the consideration, whether or not the transfer is actually registered in Ontario's land registry system. For information on the rates and calculation of the tax, please refer to Tax Bulletin LTT 2-2005 Calculating Land Transfer Tax.

1.2. Value of the Consideration

The definition of "value of the consideration" is set out in the Act and is very broad. In most cases, the value of the consideration is equal to the purchase price and the total of any mortgages or other debt assumed as part of the arrangement. However, the amount expressed in money of any consideration given or to be given, as well as any benefit given to any person as part of the arrangement, must also be included.

1.3. Transfers Between Spouses

Unless there is a specific exemption, transfers between spouses or former spouses are subject to land transfer tax.

2. Exemption for Certain Transfers Between Spouses

2.1. Three Situations

Regulation 696 R.S.O. 1990 made under the Act exempts from tax certain transfers of land between spouses and former spouses. The transfer must fall within one of the three situations described in the regulation in order to be exempt from tax. The exemption will apply where:

  1. The only consideration given is the assumption of any encumbrance registered on the land, such as a mortgage.
  2. The transfer is in compliance with a written agreement of separation, pursuant to which the parties agree to live separate and apart.
  3. The transfer is pursuant to a court order or judgment.

In all cases, the transferor and the transferee must be spouses, or former spouses, of each other.

2.2. Definition

"Spouse" means spouse as defined in section 29 of the Family Law Act. This means either of two persons who are married to each other, or who are not married to each other and who have cohabited,

  1. continuously for a period of not less than three years, or
  2. in a relationship of some permanence, if they are the natural or adoptive parents of a child.

3. How to Claim the Exemption

3.1. General

Spousal exemptions may be claimed electronically through the Teraview Land Registration System and in paper format at the local land registry office. Further details regarding the registration procedures in each scenario are outlined below.

3.2. Only Consideration is the Assumption of a Mortgage or Debt

If the only consideration given for the transfer or conveyance is the assumption of an encumbrance registered on title, the transfer is exempt from tax. In this case, the value of the consideration is the amount outstanding on any registered encumbrances.

3.3. Electronic Registration

The value of the consideration must be entered on line 1(b)(i) of the Consideration tab. Statements 9085 and 9086 must be selected under the Exemption tab:

9085 This conveyance qualifies for an exemption from tax pursuant to R.R.O. 1990, Regulation 696 as the transferor is the spouse or former spouse of the transferee and:
9086 The only consideration passing is the assumption of any encumbrance registered against the lands.

3.4. Paper Registration

The value of the consideration must be stated in paragraph 2 of the Land Transfer Tax Affidavit [PDF - 378 KB]. In paragraph 5 of the affidavit, under "Other remarks and explanations," the following explanation must be provided:

The parties are spouses (or former spouses) as defined in section 29 of the Family Law Act, and as per Regulation 696, R.R.O. 1990, no tax is payable as the only consideration passing is the assumption of any encumbrance against the lands.

3.5. Transfer is Pursuant to a Written Agreement

If the transfer or conveyance is in compliance with a written agreement in which the parties have agreed to live separate and apart, then the transfer is exempt from tax. In this case the value of the consideration is the total of any consideration given and the amount owing on any encumbrances.

3.6. Electronic Registration

The value of the consideration must be entered in the applicable lines of the Consideration tab. Statements 9085 and 9087 must be selected under the Exemption tab:

9085 This conveyance qualifies for an exemption from tax pursuant to R.R.O. 1990, Regulation 696 as the transferor is the spouse or former spouse of the transferee and:
9087 The conveyance is in compliance with the terms of a written agreement pursuant to which the parties have agreed to live separate and apart.

3.7. Paper Registration

The value of the consideration must be stated in paragraph 2 of the Land Transfer Tax Affidavit [PDF - 378 KB]. In paragraph 5 of the affidavit, under "Other remarks and explanations," the following explanation must be provided:

The parties are spouses (or former spouses) as defined in section 29 of the Family Law Act, and as per Regulation 696, R.R.O. 1990, no tax is payable as the conveyance is in compliance with a written separation agreement pursuant to which the parties have agreed to live separate and apart.

3.8. Transfer is Pursuant to a Court Order

If the transfer or conveyance is in compliance with the direction of an order or judgment, then the transfer is exempt from tax. In this case the value of the consideration is the total of any consideration given and the amount owing on any encumbrances.

3.9. Electronic Registration

The value of the consideration must be entered in the applicable lines of the Consideration tab. Statements 9085 and 9088 must be selected under the Exemption tab:

9085 This conveyance qualifies for an exemption from tax pursuant to R.R.O. 1990, Regulation 696 as the transferor is the spouse or former spouse of the transferee and:
9088 The conveyance is in compliance with the direction of an order or judgement made by a court of competent jurisdiction.

3.10. Paper Registration

The value of the consideration must be stated in paragraph 2 of the Land Transfer Tax Affidavit [PDF - 378 KB]. In paragraph 5 of the affidavit, under "Other remarks and explanations," the following explanation must be provided:

The parties are spouses (or former spouses) as defined in section 29 of the Family Law Act, and as per Regulation 696, R.R.O. 1990, no tax is payable as the conveyance is in compliance with the direction of an order or judgment made by a court of competent jurisdiction.

4. Specific Situations

4.1. Unregistered Dispositions

In rare cases where the transfer of land between spouses is by way of an unregistered disposition as described in subsection 3(1) of the Act, you must claim the exemption on the Return on the Acquisition of a Beneficial Interest in Land [PDF - 812 KB] form which must be filed directly with the Ministry of Finance within 30 days. For more general information about unregistered dispositions please refer to Land Transfer Tax and the Treatment of Unregistered Dispositions of a Beneficial Interest in Land.

4.2. Gifts of Land for Natural Love and Affection

Even though no actual monies may be passing, if there is any benefit given or to be given for the land, or there is any assumption of mortgage or debt, the monetary value of these amounts is the value of the consideration and it cannot be said that the transfer is for nil consideration or for natural love and affection only.

If there is no consideration passing for the transfer, the value of the consideration for the conveyance will be nil. As a result, the tax will also be nil. For more information please refer to our tax bulletin on Transactions for Nominal Consideration.

4.3. Electronic Registration

If no value of the consideration is otherwise passing for the transfer, a nominal amount (e.g., $2) must be entered in the Consideration tab. Statements 9049, 9146 and 9048 must be selected under the Nominal tab:

9049 Explanation for nominal considerations:
9146 m) Inter-spousal transfer for natural love and affection
9048 The land is not subject to an encumbrance

4.4. Paper Registration

If no value of the consideration is otherwise passing for the transfer, a nominal amount (e.g., $2) must be stated in paragraph 2 of the Land Transfer Tax Affidavit [PDF - 378 KB] and paragraph 4 must be marked to indicate that the land is not subject to any encumbrance. In paragraph 5 of the affidavit, under "Other remarks and explanations," the following explanation must be provided:

The parties are spouses (or former spouses) as defined in section 29 of the Family Law Act, no tax is payable as the conveyance is a nominal inter-spousal transfer for natural love and affection.

5. Additional Information

If this bulletin does not completely address your particular situation, refer to the Act and related regulations, visit our website at ontario.ca/finance or contact:

Ministry of Finance
Audit Branch
Land and Resource Taxes Section
33 King Street West
PO Box 625
Oshawa ON  L1H 8H9

  • 1 866 ONT-TAXS (1 866 668-8297)
  • 905 433-5770 fax
  • 1 800 263-7776 for teletypewriter (TTY)
Page: 3219  |