Published: May 2000
Content last reviewed: September 2009
This bulletin clarifies application of the Land Transfer Tax Act ("Act") to certain transfers of land where land has been taken under statutory authority (such as by way of expropriation) and where land has been acquired as a replacement for land that has been taken under statutory authority.
Where land is conveyed to a person by whom notice of an intention to take it under statutory authority was given and compensation for injurious affection (business and personal damages) is paid by the person acquiring the land, the amount of such compensation is not part of the value of the consideration subject to taxation under the Act. Amounts paid for injurious affection should not be included in the Affidavit of Residence and Value of the Consideration. However, the amount paid to acquire the land itself is part of the value of the consideration on which tax is calculated.
It should be noted that the registration of a notice of expropriation is a taxable conveyance under the Act and is therefore subject to tax.
Note This also applies to unregistered dispositions described in section 3 of the Act. As in all cases of a disposition under section 3, a return must be filed and the tax paid as required.
Subsection 1(2) of the Act sets out the following:
"Where it is established to the satisfaction of the Minister that land is being acquired by a person for the purpose of replacing land that was taken from the person under statutory authority, that was sold by the person to a person by whom notice of an intention to take the land under statutory authority was given, or that was sold by the person to a person having the power to take the land under statutory authority, and it is reasonable to assume in the case where the land is sold that, had the land not been sold, it would have been taken under statutory authority by the person to whom it is sold, the value of the consideration for the land being acquired shall be reduced by an amount equal to the compensation or proceeds of sale reasonably attributable to the land that was taken or sold."
Any application for the reduction in the consideration pursuant to subsection 1(2) must be submitted to the Ministry of Finance and the tax paid directly there on the consideration declared. The following documentation will be required:
Original, duplicate and one photocopy of the document to be registered
Three original signed Affidavits of Residence and Value of the Consideration, setting out the reduced consideration
Copy of agreement setting out the consideration or compensation entered into with respect to property being taken, or other evidence of the valuation of the property available
Copy of the agreement of purchase and sale respecting the property being purchased and any other relevant documents
Supplementary affidavit setting out that the conditions of subsection 1(2) of the Act have been met
Cheque for applicable tax
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
33 King St W
PO Box 625
Oshawa ON L1H 8H9