First Time Buyers and Land Transfer Tax

Buyer should understand role of Land Transfer Tax in closing cost’s calculation.

Land transfer taxes are a part of the process unless you live in Alberta, Saskatchewan, or rural Nova Scotia. These taxes are levied on properties that are changing hands, are the responsibility of the buyer. Depending on where you live, taxes can range from a half a per cent to two per cent of the total value of the property.

Many provinces have multi-tiered taxation systems like we have here in Ontario. If you buy a property for $260,000 in Ontario, for example, .5 per cent is charged on the first $55,000, 1 percent is charged on $55,000 – $250,000, while the $250,000 – $400,000 range is taxed at 1.5 per cent. Your total tax bill? $2,375.00.

The following chart illustrates Land Transfer Taxes by province:
Ontario
Up to $55,000 X .5 % of total property value
From $55,000 to $250,000 X 1 % of total property value
From $250,000 to $400,000 X 1.5 % of total property value
From $400,000 up X 2 % of total property value
British Columbia
Up to $200,000 X 1 % of total property value
From $200,000 up X 2 % of total property value
Manitoba
MANITOBA Up to $30,000 N/A From $30,000 to $90,000 X .5 % of total property value
From $90,000 to $150,000 X 1 % of total property value
From $150,000 up X 1.5 % of total property value
Quebec
Up to $50,000 X .5 % of total property value
From $50,000 to $250,000 X 1 % of total property value
From $250,000 up X 1.5 % of total property value
Nova Scotia
Halifax Metro
1.5 per cent on total property value
Outside Halifax County, check with local municipality.

For First time home buyer’s Ontario Government has a provision for Land Transfer Tax Refund. Maximum amount of Refund one can get is $2000. The refund can be received at the time of registration or within 18 months of the transfer.

For example:

Cost of Home      Tax Payable            Tax Refund         Net Tax Payable
$100,000              $725                         $725                     $0
$200,000             $1,725                      $1,725                  $0
$300,000             $2,975                      $2,000                 $975

More information can be found at Ministry of Finance’s website here – LTT Refund for First-time Home Buyers.