Calculating Land Transfer Tax

Bulletin LTT 2-2005
Published: September 2005
Content last reviewed: September 2009
ISBN: 0-7794-8518-1 (Print), 0-7794-8520-3 (PDF), 0-7794-8519-X (HTML)

  • This bulletin provides general guidelines on the calculation of land transfer tax payable on every conveyance and disposition of land in Ontario. 
  • This bulletin replaces Land Transfer Tax Information Bulletin 1-89.
  • The information in this bulletin does not replace the law found in the Land Transfer Tax Act ("Act") and related regulations.

General

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 over fifty years and transfers between corporations and shareholders. 

For the definitions of "value of the consideration" and "land," please see the end of this bulletin or the Act.

Tax Rates

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 - 1.5 %

Amounts exceeding $400,000 where the land contains one or two single family residences - 2.0 %

For the definition of "single family residence," as defined in subsection 1(1) of the Act please see the end of this bulletin or the Act.

Calculation Examples

Example #1

Value of the consideration equals $95,000.

  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% (40,000 × 0.01) = $400
     
    Total land transfer tax payable = $ 675

Example #2

Value of the consideration equals $450,000 for land not containing one or two single family residences.

  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 by 1.5% (200,000 × 0.015)= $3,000

Total land transfer tax payable = $5,225

Example #3

Value of the consideration equals $450,000 for land containing one or two single family residences.

  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
  4. Multiply the amount exceeding $400,000 by 2.0% (50,000 × 0.02)= $1,000

Total land transfer tax payable = $5,475

Quick Calculation Formula

Formula for Quick Calculation of Land Transfer Tax

For a quick calculation of land transfer tax, refer to the following table.  Residential property refers to land containing one or two single family residences as defined by the Act.  "Value of the Consideration" for a conveyance or disposition is shown as  "VC."  Land transfer tax payable is shown as "LTT."

For the Value of the Consideration:

  • Up to and including $55,000 = VC × 0.005
  • Exceeding $55,000 and up to $250,000 = (VC × 0.01) - $275
  • Exceeding $250,000, for property other than residential = (VC × 0.015) - $1525
  • Exceeding $250,000 up to $400,000, for residential property = (VC × 0.015) - $1525
  • For residential property exceeding $400,000 = (VC × 0.02) - $3525

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

"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

"single family residence" means a unit or proposed unit under the Condominium Act 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 Consideration

"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 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
Land and Resource Taxes Section
33 King Street West
PO Box 625
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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