Exemption for Certain Transfers of Land Between Registered Charities

Bulletin
Published: October 2010
Content last reviewed: October 2012
ISBN: 978-1-4435-4658-4 (Print), 978-1-4435-4660-7 (PDF), 978-1-4435-4659-1 (HTML)

  • This bulletin highlights the requirements to qualify for, and the procedures to apply for, the land transfer tax exemption for certain transfers of land between registered charities, as provided for in Ontario Regulation 386/10.
  • This bulletin provides the following information:
    • general description of land transfer tax
    • requirement to qualify for this exemption
    • procedure for claiming the land transfer tax exemption
    • procedure for claiming a refund of land transfer tax paid
    • definitions.
  • This bulletin provides general information. It is not exhaustive and should not be considered a substitute for the Land Transfer Tax Act (Act) and its regulations.

General

Introduction

Ordinarily, the transfer of land is subject to land transfer tax. Effective March 26, 2010, an exemption from land transfer tax applies to certain transfers of land between qualifying trusts and qualifying corporations which are registered charities.

Only transfers from either a qualifying trust or a qualifying corporation to a qualifying corporation are eligible for the exemption.

The terms "qualifying trust", "qualifying corporation" and "registered charity" are defined under section 2 of Ontario Regulation 386/10, and are set out at the end of this bulletin.

Requirements to Qualify for Exemption

General Qualification

To qualify for the land transfer tax exemption for registered charities, the transfer must occur on or after March 26, 2010, and the value of the consideration for the transfer must be nil, other than the assumption of any encumbrance registered against the land.

Transferor Requirements

In addition, the transferor:

  • if a qualifying trust, must have been the owner of the land immediately prior to the transfer;
  • if a qualifying corporation, must have been the beneficial owner of the land immediately prior to the transfer;
  • must have paid land transfer tax when it acquired the land; and
  • must have held the land for a charitable purpose.

Transferee Requirements

The transferee must:

  • be a qualifying corporation; and
  • continue to hold the land for the same charitable purpose as the transferor for at least one year after the date of the transfer.

Procedures for Claiming Land Transfer Tax Exemption

Electronic Registration

In the electronic land registration system, the exemption may be claimed by selecting the appropriate electronic statements located under the Exemptions tab of the land transfer tax section:

9159

This conveyance qualifies for an exemption from tax under Ontario Regulation 386/10 (Exemption- Charity Reorganization) in that:

9160

a) The transferor is either a qualifying corporation or a qualifying trust as defined by the Regulation, and was issued registered charity number NUMBER by the Minister of National Revenue, and held the land for the charitable purpose of DESCRIBE PURPOSE.


9161

b) Land transfer tax was paid under the Act upon the prior transfer of the land to the transferor.

9162

c) The transferee is a qualifying corporation as defined by the Regulation, and was issued registered charity number NUMBER by the Minister of National Revenue, and will hold the land for the same charitable purpose of which it was held by the transferor, for at least one year after the date of the transfer.

9163

d) The value of the consideration is nil, other than the assumption by the transferee of any encumbrance registered against the land at the time of the transfer

All of the statements must be selected. Note that some these statements require additional information:

9160

"NUMBER" – you must provide the issued registered charity number of the transferor

9160

"DESCRIBE PURPOSE" – you must identify the charitable purpose of the transferor

9162

"NUMBER" - you must provide the issued registered charity number of the transferee.

Paper Registration

In regions where paper registration is available, a transfer may be registered without the payment of tax by attaching to the Transfer/Deed both the Land Transfer Tax Affidavit [PDF - 378 KB] and a properly completed Affidavit re transfer between registered charities [PDF - 26 KB].

A statement in paragraph 5 of the Land Transfer Tax Affidavit [PDF - 378 KB] must indicate that the transfer is exempt from land transfer tax pursuant to O.Reg. 386/10.

Unregistered Dispositions

Where the transfer of land is not registered within 30 days, a Return on the Acquisition of a Beneficial Interest in Land [PDF - 812 KB] must be filed with the ministry at the address at the end of this bulletin. To claim the exemption the following documentation must be submitted with the return:

Once the above documentation has been received, the ministry may request further information or documentation.

Procedures for Claiming Tax Refunds

Application for Refund Within Four Years of Tax Payment

If land transfer tax has been paid on a transfer of land and all requirements have been met, an application for a land transfer tax refund may be made within four years from the date on which the tax was paid. Please remember, the registered charities exemption is effective for transfers on or after March 26, 2010.

Documentation Required for a Refund

To apply for a refund of land transfer tax paid, the following documentation must be submitted to the ministry at the address at the end of this bulletin:

  • copy of the registered instrument on which land transfer tax was paid;
  • proof of payment of land transfer tax (such as a Teranet docket summary);
  • copy of the agreement of purchase and sale, and any other agreements related to the transfer;
  • copy of the statement of adjustments; and
  • properly completed Affidavit re transfer between registered charities [PDF - 26 KB].

Once the above documentation has been received, the ministry may request further information or documentation.

Registration Fees are Not Refundable

Please note, land registration fees are not refundable and should not be included in the amount of refund claimed.

Enquiries regarding land registration fees should be directed to ServiceOntario at the Land Registry Office where the document was registered. Visit Ontario's web page Land Registry Office Locations for addresses and phone numbers of Land Registry Offices in Ontario.

Definitions

Qualifying Corporation

"qualifying corporation" means a non-profit non-share capital corporation that is a registered charity.

Qualifying Trust

"qualifying trust" means a trust that is a registered charity.

Registered Charity

"registered charity" means an organization that is a registered charity as defined in subsection 248 (1) of the Income Tax Act (Canada) and holds a registration number issued by the Minister of National Revenue but does not include an organization whose registration as a charity under that Act is suspended or revoked.

Subsection 248 (1) of the Income Tax Act (Canada) states:
"registered charity" at any time means

  1. a charitable organization, private foundation or public foundation, within the meanings assigned by subsection 149.1(1), that is resident in Canada and was either created or established in Canada, or
  2. a branch, section, parish, congregation or other division of an organization or foundation described in paragraph (a), that is resident in Canada and was either created or established in Canada and that receives donations on its own behalf,

that has applied to the Minister in prescribed form for registration and that is at that time registered as a charitable organization, private foundation or public foundation.

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
Oshawa ON  L1H 8H9

  • 1 866 ONT-TAXS (1 866 668-8297)
  • Fax: 905 433-5770
  • 1 800 263-7776 for teletypewriter (TTY)
Page: 3059  |