Do you find land transfer taxes confusing? Don’t worry, so do many others! Below are some frequently asked questions to help you start to understand land transfer taxes. If you have any additional questions you can ask one of our educated agents by clicking here.
Who pays land transfer taxes?
Land transfer taxes are paid to the province when a real estate transaction is completed. It is paid by the purchaser, not the seller.
How much is paid?
Typically it depends on the price of the land, however there are always exceptions. For example, if you are a first time home buyer, you may be eligible to be refunded.
Is land transfer tax the same as HST?
No, HST only applies to newly constructed homes or homes that have been renovated to the point where they are practically new. Land transfer tax applies to the resale of homes.
What are the land transfer tax rates in Ontario?
The tax rates calculated on the value of the consideration are:
0.5% up to and including $55,000
1% above $55,000 up to and including $250,000
1.5% above $250,000
2% above $400,000 where the land contains one or two single family residences.
What happens if I overpay my land transfer tax or was un aware that I was eligible for a refund as a first time home buyer?
The good news, you have 4 years to submit a refund request if you have over paid your land transfer tax. The bad news is, if you are a first time home buyer, you are required to submit your refund request within 18 months of closing of the transaction.
How do I submit a refund request?
If you overpaid land transfer tax, you can ask the Ministry of Finance for a refund. Here’s how:
Write a letter explaining the reason for your refund request and include:
- a copy of the registered conveyance
- evidence of the amount of tax paid on registration
- a copy of the agreement of purchase and sale (including all schedules and amendments)
- a copy of the statement of adjustments
Mail your letter to the Ministry of Finance, 33 King Street West, PO Box 625, Oshawa, Ontario, L1H 8H9.