Taxes can feel like an endless maze in Canada.

With an election on the way, there's a good chance you may be dealing with terms and payments you've never even heard of — especially if you're buying property.

The Ontario land transfer tax is one such fee that you may come across.

In this guide, we'll break down everything you need to know about this tax, including:

• Its rates
• Rebates
• How to calculate it
• How to pay it

And more. Let's begin!

By the way — are you already a homeowner? If you want to buy a second property and need to free up some cash to pay fees like the Land Transfer Tax (LTT), a home equity loan might be right for you. Lotly works with 50+ lenders nationwide so we can find the best loan terms for your financial goals. Book a free consultation today to learn more.

What is the land transfer tax in Ontario?

Ontario's land transfer tax is a tax levied on the purchase of land or any interest in land within the province.

• Who pays it? Paid by the buyer.
• What is it based on? The sale price of the property.
• What does it apply to? This tax applies to all types of properties, including residential homes, commercial buildings, and vacant land.

It's important to note that the tax also applies to newly-built homes and resale properties.

How to calculate the land transfer tax in Ontario

Ontario Ministry of Finance Land Transfer Tax Calculator

• Official government calculator provided by the Ontario Ministry of Finance
• Offers accurate calculations based on the most up-to-date tax rates and regulations

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Teraview PLTT Calculator

• Provided by Teraview, the electronic land registration system used in Ontario
• Calculates both the Provincial Land Transfer Tax (PLTT) and Non-Resident Speculation Tax (NRST)

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Toronto Regional Real Estate Board LTT Calculator

• Offers calculators for both commercial and residential properties (including settings for first-time home buyers).
• Breaks down taxes by Toronto and Provincial Land Transfer Tax.

Current tax rates for land transfer in Ontario

Your land transfer tax rates will depend on the purchase agreement and sale date. For any agreement and sales after November 14, 2016, and electronic registrations made after January 1, 2017, these are the tax rates:

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Are you eligible for land transfer tax rebates? (checklist)

If you're a first-time home buyer, however, you may be exempt from paying these taxes:

Requirements for exemption from the land transfer tax in Ontario:

• You must be at least 18 years old and a citizen or permanent resident of Canada.
• You must live in the home as your principal residence within 9 months of transfer.
• You must have never owned an eligible home or interest in a home anywhere in the world.
• The same rules apply to your spouse for the time they have been your spouse.

How much can you get back?

• Maximum refund of $4,000.
• No land transfer tax is payable on the first $368,000 of the home’s value for qualifying first-time purchasers.
• Homes valued above $368,000 receive a maximum refund of $4,000.

Here's how you apply:

1. Electronic Registration:
   
   • Claim the refund during registration by completing the electronic statements under the "Explanation" tab.
   • No further paper submission is required.
2. Ministry of Finance online portal:
   
   • Visit the Ministry of Finance’s online services portal.
   • Select "Applying for a Land Transfer Tax (LTT) Refund/Rebate."
   • Choose “Submit an application for the FTHB refund.”
   • Complete the online form and attach the required supporting documents.
   • Receive email acknowledgment the next business day.
3. Alternative submission:
   
   • Submit the Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes by email, fax, or mail.

Forms and documentation you'll need for land transfer tax refunds

• Copy of registered conveyance (transfer/deed).
• Agreement of purchase and sale with all schedules and amendments.
• Statement of Adjustments (if applicable).
• Proof of occupancy (e.g., driver's license, credit card bills, moving bills).
• Proof of Canadian citizenship or permanent residency.

Note: Applications must be submitted within 18 months of registration.

How to pay your land transfer tax (step-by-step)

It can be challenging to figure out when and how you pay your land transfer taxes, but don't worry — we're here to demystify it:

1. Once you have completed the purchase of your property, your lawyer or notary will calculate your land transfer tax and let you know how much you owe.
2. You must pay this amount to the Ministry of Finance within 30 days of registration. If you don't pay on time, interest will accrue at 1.25% monthly.
3. You can pay your land transfer tax through different methods, including:

• Online payment through financial institutions
• Mail-in payment with a cheque or money order
• In-person at any Service Ontario location

4. If you are a first-time home buyer, you may be eligible for a refund of all or part of your land transfer tax. You can apply for this refund within 18 months after the registration date.
5. Certain exemptions from land transfer tax may also apply to specific situations, such as transfers between spouses or parents and children.

Before making your payment, consult your lawyer or notary to determine if you qualify for any exemptions or refunds.

What is the Non-Resident Speculation Tax?

The Non-Resident Speculation Tax (NRST) is an additional tax applied to non-resident individuals or foreign corporations who buy residential properties in select regions of Ontario, including the Greater Golden Horseshoe area. Ontario’s government introduced the tax in 2017 to cool down the housing market and discourage speculative real estate investments by non-residents.

If you are a Canadian citizen or permanent resident, you are not subject to the NRST. However, if you're a foreign buyer, you must pay an additional 25% on top of your regular land transfer tax. This tax is due at the time of purchase and must be paid along with your land transfer tax.

Note: the NSRT applies alongside the LTT, not on top of it. In other words, the VOC is the property's transaction price, the post-tax amount.

Get cash from your property with Lotly

Let's go over some of the key takeaways from this guide:

• Understand the scope of Ontario's land transfer tax. This tax applies to all property types, including new builds and resales, and is based on the property's sale price, with buyers responsible for payment.
• Take advantage of tools and rebates to reduce your tax burden. Use calculators like those from Ratehub.ca or nesto.ca to estimate your tax, and first-time homebuyers can claim up to $4,000 in rebates if they meet eligibility criteria.
• Plan your payment and be aware of additional taxes. Land transfer tax must be paid within 30 days of registration, with options like online banking or in-person payment. Non-residents may face an additional 25% Non-Resident Speculation Tax on residential purchases in specific areas.

If you’re buying a second property and feeling the pinch, a home equity loan can provide the upfront cash to manage taxes without touching your emergency fund — and Lotly can help.

We work with you to understand your financial goals and restrictions. Then, we connect with our network of more than 50 lenders across Canada to find a home equity loan best suited for your needs. Book a free consultation today to learn more.

Frequently Asked Questions (FAQs)

How much is the land transfer tax on $300,000 in Ontario?

Based on Ontario's current land transfer tax rates, the total tax on a $300,000 property would be $2,975. However, this can vary depending on factors like buyer eligibility for rebates and additional taxes like the Non-Resident Speculation Tax. Use online calculators or consult with a professional for an accurate estimate.

How do I avoid land transfer tax in Ontario?

Unfortunately, land transfer tax is a mandatory payment in Ontario. However, there are ways to reduce your tax burden or claim rebates if you meet particular criteria. For example, first-time homebuyers can receive up to $4,000 in rebates, and you may be eligible for certain exemptions based on your occupation or disability status. Researching and consulting with professionals will help to determine the best options for your situation.

Can you claim land transfer tax on your tax return?

No, land transfer tax is not a deductible expense on federal or provincial tax returns. However, as mentioned earlier, some rebates and exemptions are available that can help reduce the overall amount paid.

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