Calculating Land Transfer Tax

Effective April 21, 2017, a 15% tax is imposed on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe by individuals who are not citizens or permanent residents of Canada or by foreign corporations (foreign entities) or taxable trustees. This new tax is in addition to Ontario's current Land Transfer Tax. The implementation of the Non‑Resident Speculation Tax is subject to the approval of the Legislature.


This page provides general guidelines on the calculation of land transfer tax payable on every registration and disposition of land in Ontario.

The information on this page does not replace the law found in the Land Transfer Tax Act (Act) and related regulations.

Introduction 

Land transfer tax is payable on every conveyance of land tendered for registration and every unregistered disposition of a beneficial interest in land, unless specifically exempt under the Act or regulations.

The definition of land as defined in subsection 1(1) of the Act is broad and includes lands, buildings, structures, structures to be constructed, fixtures and any interest in these.

Land transfer tax is calculated on the value of the consideration as defined in subsection 1(1) of the Act. It includes the purchase price, liabilities assumed, benefits conferred, soft costs and the cost of upgrades. In some instances, the value of the consideration is deemed to be the fair market value of the land. For example, leases with terms that can exceed fifty years and certain transfers between corporations and shareholders.

For the definitions of value of the consideration and land, please see Definitions or the Act.

Vacant lot with a construction contract

Where a construction contract is entered into as part of the arrangement relating to the purchase of a vacant lot or lots, the value of the consideration is calculated on the:

  • total cost of the lot, plus
  • cost of construction contract.

Value of consideration in foreign currency

All monies must be expressed in Canadian dollars. The land transfer tax statements must set out the value of the consideration in Canadian dollars. The date of currency conversion should be the:

  • date that the agreement of purchase and sale is accepted and becomes a binding contract, or
  • date of registration if there is no written agreement.

Tax rates

Effective January 1, 2017, the tax rates for land transfer tax will depend on the date of the agreement of purchase and sale.

If an agreement of purchase and sale is entered into after November 14, 2016, and registration or the disposition occurs on or after January 1, 2017, the tax rates on the value of the consideration are as follows:

  • amounts up to and including $55,000: 0.5%
  • amounts exceeding $55,000, up to and including $250,000: 1.0%
  • amounts exceeding $250,000, up to and including $400,000: 1.5%
  • amounts exceeding $400,000: 2.0%
  • amounts exceeding $2,000,000, where the land contains one or two single family residences: 2.5%.

For the definition of single family residence, see Definitions or the Act.

Transitional tax rates

The following rates of land transfer tax apply to all registrations and dispositions that occur prior to January 1, 2017. Tax is calculated on the value of the consideration at the following rates:

  • amounts up to and including $55,000: 0.5%
  • amounts exceeding $55,000, up to and including $250,000: 1.0%
  • amounts exceeding $250,000: 1.5%
  • amounts exceeding $400,000, where the land contains one or two single family residences: 2.0%.

For transfers with agreements of purchase and sale that were entered into on or before November 14, 2016, the above rates will apply regardless of the date of registration or disposition.

Electronic registration on or after January 1, 2017

Teraview, the software used to access Ontario's electronic land registration system, will not be able to accommodate the transitional tax rates. Effective January 1, 2017, all electronic registrations will be processed at the new tax brackets and tax rates. Accordingly, anyone who has overpaid the land transfer tax may claim a refund of the portion of land transfer tax overpaid. In the alternative, transferees may pre-pay land transfer tax at the Ministry of Finance.

Documentation may be submitted to:

Ministry of Finance
Land Taxes Section
Compliance Branch
33 King Street West
Oshawa ON L1H 8H9

Documentation required for refunds includes:

  1. Authorizing or Cancelling a Representative forms, completed by each transferee
  2. copy of the Registered Instrument
  3. copy of the docket summary showing the amount of land transfer tax paid
  4. copy of the Agreement of Purchase and Sale, with all schedules attached
  5. copy of the Statement of Adjustments
  6. if the value of the consideration is based on the fair market value of the land, any appraisals or documentation that is evidence of the fair market value of the land
  7. a cover letter setting out the reason for the refund, and to whom the refund cheque should be made payable.

Documentation required to pre-pay land transfer tax includes:

  1. Authorizing or Cancelling a Representative forms, completed by each transferee
  2. copy of the Document in preparation
  3. cheque for land transfer tax (certified, if not drawn on the solicitor's trust account)
  4. copy of the Agreement of Purchase and Sale, with all schedules attached
  5. copy of the draft Statement of Adjustments
  6. if the value of the consideration is based on the fair market value of the land, any appraisals or documentation that is evidence of the fair market value of the land
  7. a cover letter requesting the prepayment of land transfer tax.

Calculation example

For a transfer of land or disposition of beneficial interest in land in which the value of the consideration equals $400,000:

  1. multiply $55,000 by 0.5% (55,000 × 0.005) = $275
  2. multiply the amount exceeding $55,000 up to $250,000 by 1.0% (195,000 × 0.01) = $1,950
  3. multiply the amount exceeding $250,000 up to $400,000 by 1.5% (150,000 × 0.015) = $2,250.

Total land transfer tax payable = $4,475.

Quick calculation formula

Formula for quick calculation of land transfer tax

For a quick calculation of land transfer tax, refer to the following formulae. Value of the consideration for a conveyance or disposition is shown as VOC. Land transfer tax payable is shown as LTT. Single family residence as defined in the Land Transfer Tax Act is shown as SFR.

Tax rates

If the agreement of purchase and sale was entered into after November 14, 2016, the tax rates for registrations or dispositions that occur on or after January 1, 2017, are as follows:

For the value of the consideration:

  • up to and including $55,000: LTT = VOC × 0.005
  • exceeding $55,000, and up to $250,000: LTT = (VOC × 0.01) - $275
  • exceeding $250,000, and up to $400,000: LTT = (VOC × 0.015) - $1,525
  • exceeding $400,000, for property other than property with one or two SFRs: LTT = (VOC × 0.02) - $3,525
  • exceeding $400,000, and up to $2,000,000, for property with one or two SFRs: LTT = (VOC x 0.02) - $3,525
  • for property with one or two SFRs exceeding $2,000,000: LTT = (VOC × 0.025) - $13,525.

Transitional tax rates

If the agreement of purchase and sale was entered into:

  • after November 14, 2016, and registration or disposition occurs before January 1, 2017, or
  • on or before November 14, 2016, regardless of the date of registration or disposition:

For the value of the consideration:

  • up to and including $55,000: LTT = VOC × 0.005
  • exceeding $55,000, and up to $250,000: LTT = (VOC × 0.01) - $275
  • exceeding $250,000, for property other than property with one or two SFRs: LTT = (VOC × 0.015) - $1,525
  • exceeding $250,000, and up to $400,000, for property with one or two SFRs: LTT = (VOC × 0.015) - $1,525
  • for property with one or two SFRs exceeding $400,000: LTT = (VOC × 0.02) - $3,525.

Historical land transfer tax rates

Land transfer tax rates payable on the value of the consideration for registered conveyances

Effective date Residents of Canada Non-residents of Canada and trustees for non-residents of Canada
All land All land
January 1, 2017
(unless grand-parented due to the agreement of purchase and sale being entered into on or before November 14, 2016)
Amounts up to and including $55,000: 0.5%
Amounts exceeding $55,000, up to and including $250,000: 1.0%
Amounts exceeding $250,000, up to $400,000: 1.5%
Amounts exceeding $400,000: 2.0%
Amounts exceeding $2,000,000, where the land contains one or two single family residences: 2.5%
Same rate as for residents of Canada
May 7, 1997 Amounts up to and including $55,000: 0.5%
Amounts exceeding $55,000, up to and including $250,000: 1.0%
Amounts exceeding $250,000: 1.5%
Amounts exceeding $400,000, where the land contains one or two single family residences: 2.0%
Same rate as for residents of Canada
    Unrestricted land Land that is not unrestricted land
June 1, 1989 Amounts up to and including $55,000: 0.5%
Amounts exceeding $55,000. up to and including $250,000: 1.0%
Amounts exceeding $250,000: 1.5%
Amounts exceeding $400,000, where the land contains one or two single family residences: 2.0%
Same rate as for residents of Canada 20%
January 1, 1986 Amounts up to and including $55,000: 0.5%
Amounts exceeding $55,000: 1%
Amounts exceeding $250,000, where the land contains one or two single family residences: 1.5%
Same rate as for residents of Canada 20%
April 11, 1979 Amounts up to and including $45,000: 0.4%
Amounts exceeding $45,000: 0.8%
Same rate as for residents of Canada 20%
April 20, 1977 Amounts up to and including $35,000: 0.3%
Amounts exceeding $35,000: 0.6%
Same rate as for residents of Canada 20%
April 10, 1974 Amounts up to and including $35,000: 0.3%
Amounts exceeding $35,000: 0.6%
20% 20%

Land transfer tax rates payable on the value of the consideration for unregistered conveyances

Effective date Residents of Canada Non-residents of Canada and trustees for non-residents of Canada
All land All land
January 1, 2017
(unless grand-parented due to the agreement of purchase and sale being entered into on or before November 14, 2016)
Amounts up to and including $55,000: 0.5%
Amounts exceeding $55,000, up to and including $250,000: 1.0%
Amounts exceeding $250,000, up to $400,000: 1.5%
Amounts exceeding $400,000: 2.0%
Amounts exceeding $2,000,000, where the land contains one or two single family residences: 2.5%
Same rate as for residents of Canada
May 7, 1997 Amounts up to and including $55,000: 0.5%
Amounts exceeding $55,000, up to and including $250,000: 1.0%
Amounts exceeding $250,000: 1.5%
Amounts exceeding $400,000, where the land contains one or two single family residences: 2.0%
Same rate as for residents of Canada
    Unrestricted land Land that is not unrestricted land
July 19, 1989 Amounts up to and including $55,000: 0.5%
Amounts exceeding $55,000, up to and including $250,000: 1.0%
Amounts exceeding $250,000: 1.5%
Amounts exceeding $400,000, where the land contains one or two single family residences: 2.0%
Same rate as for residents of Canada 20%
April 21, 1983 Not applicable Not applicable For agricultural land, only, 20%. Note: a disposition of land is deemed to have occurred if a corporation owning agricultural land becomes a non-resident of Canada through the sale of shares or through amalgamation
April 10, 1974 Not applicable Not applicable Not applicable

Electronic registration

Automatic calculation of tax on electronic land registrations

The electronic land registration system automatically calculates the land transfer tax payable based on the amount in box (g) 'VALUE of land, building, fixtures and goodwill subject to Land Transfer Tax' in the Consideration tab.  The system also takes into account any exemptions from tax claimed.

Where the value of the consideration is greater than $400,000, the > $400,000 tab of the land transfer tax section of the electronic land registration system must be completed. Statement 9031 must be selected:

  • 9031: I have read and considered the definition of "single family residence" set out in subsection 1(1) of the Act.  The land being conveyed herein:

Also, one of the following three statements must be selected:

  • 9032: contains at least one and not more than two single family residences.
  • 9033: does not contain a single family residence or contains more than two single family residences.
  • 9038: contains at least one and not more than two single family residences and the lands are used for other than just residential purposes.  The transferee has accordingly apportioned the value of consideration on the basis that the consideration for a single family residence is AMOUNT and the remainder of the lands are used for TEXT purposes.

Selecting statement 9038 requires the apportioned amount of the value of consideration be inserted where AMOUNT is indicated, as well as additional text inserted describing the use of the remainder of the land where TEXT is indicated.  Please note that "vacant" or "no use" is not considered to be another use.

Definitions

"land" includes lands, tenements and hereditaments and any estate, right or interest therein, a structure to be constructed on land as part of an arrangement relating to a conveyance of land, a leasehold interest or estate, the interest of an optionee, the interest of a purchaser under an agreement to sell land, or goodwill attributable to the location of land or to the existence thereon of any building or fixture, and fixtures.

"single family residence" means a unit or proposed unit under the Condominium Act, 1998 or a structure or part of a structure that is designed for occupation as the residence of a family, including dependants or domestic employees of a member of the family, whether or not rent is paid to occupy any part of it and whether or not the land on which it is situated is zoned for residential use and,

  1. includes such a residence that is to be constructed as part of the arrangement relating to a conveyance, and
  2. does not include such a residence that is constructed or is to be constructed on agricultural land that is eligible to be classified in the farm property class prescribed under the Assessment Act.

"value of the consideration" includes,

  1. the gross sale price or the amount expressed in money of any consideration given or to be given for the conveyance by or on behalf of the transferee and the value expressed in money of any liability assumed or undertaken by or on behalf of the transferee as part of the arrangement relating to the conveyance and the value expressed in money of any benefit of whatsoever kind conferred directly or indirectly by the transferee on any person as part of the arrangement relating to the conveyance,
     
  2. in the case of a final order of foreclosure under any mortgage or charge affecting land, the lesser of,
     
    1. the value of the consideration determined under clause (a) plus the amount owed under the mortgage or charge at the time it is foreclosed, including principal, interest and all other costs and expenses other than municipal taxes, secured by the mortgage or charge and owing at the time plus the amount owing similarly calculated under any mortgage or charge that is subsequent in priority to the mortgage or charge in respect of which the final order of foreclosure is made and that is held by the mortgagee or chargee in whose favour the final order of foreclosure that is registered is made, or
       
    2. an amount established to the satisfaction of the Minister to be equal to the fair market value of the land that is subject to the mortgage or charge,
       
  3. 1. in the case of a conveyance of land to the mortgagee or chargee under a mortgage or charge affecting the land when the conveyance is given in satisfaction of the amount owed under the mortgage or charge, the lesser of,
     
    1. the value of the consideration determined under clause (a) plus the amount owed under the mortgage or charge at the time the conveyance is made, including principal, interest and all other costs or expenses other than municipal taxes, secured by the mortgage or charge and owing at the time plus the amount owing similarly calculated under any other mortgage or charge that is subsequent in priority to the mortgage or charge in respect of which the conveyance is made, if that mortgage or charge is held by the mortgagee or chargee to whom the conveyance is made, or
       
    2. an amount established to the satisfaction of the Minister to be equal to the fair market value of the land that is subject to the conveyance,
       
  4. in the case where a lease of land, a transfer of the interest of a lessee under a lease of land, or a notice of any kind in writing signifying the existence of an unregistered lease of land or of an unregistered transfer of the interest of a lessee under a lease of land is not exempt from tax by virtue of subsection (6), the fair market value, ascertained as at the time of the tender or submission for registration, of the land to which the lease extends or of a smaller portion of such land if only such smaller portion is conveyed,
     
  5. in the case of a caution or notice of any kind in writing signifying the existence of any unregistered instrument or writing by which land is conveyed and that is not a notice in writing described in clause (c), the value of the consideration determined under clause (a) or (b) for the land conveyed by the unregistered instrument or writing that is referred to in such caution or notice in writing that is not a notice in writing described in clause (c),
     
  6. in the case of a conveyance of land from a trustee (whether or not the trustee is so described in the conveyance) to a person to whom or for whose benefit any equitable or beneficial interest in the land has been transferred by a conveyance or conveyances that have not been registered, the value of the consideration determined under clauses (a) to (d), whichever is applicable, in respect of the unregistered conveyances made to such person,
     
  7. in the case of a conveyance of land from a trustee to another trustee (whether or not either trustee is so described in the conveyance) where,

    1. the person to whom or for whose benefit any equitable or beneficial interest in the land is held is not the same person to whom or for whose benefit any equitable or beneficial interest in the land was held by the trustee making the conveyance when that trustee first acquired legal interest in the land, and
       
    2. valuable consideration has been given by the transferee of an equitable or beneficial interest for the transfer of any equitable or beneficial interest in the land held by the trustee making the conveyance while that trustee was the holder of the legal interest in the land, the fair market value, ascertained at the time of the tender or submission for registration, of the land to which the conveyance extends, or
  8. in the case of a conveyance of land to a corporation where any part of the consideration consists of the allotment and issuance of the corporation's shares or in the case of a conveyance of land from a corporation to any of its shareholders the fair market value, ascertained at the time of the tender or submission for registration, of the land to which the conveyance extends.

Additional Information

If this page 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
Land Taxes Section
33 King Street West, 3rd Floor
Oshawa ON   L1H 8H9

  • 1‑866‑ONT‑TAXS (1‑866‑668‑8297)
  • Fax: 905‑433‑5770
  • 1‑800‑263‑7776 for teletypewriter (TTY)
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