One of the biggest closing costs to keep in mind when purchasing a new home is the land transfer tax. If you’re buying in Toronto there are 2, one for Toronto, and one for Ontario.

First time home buyers will receive provincial and municipal rebates, however these rebates don’t exist for the more “seasoned” buyers.

As an example:

If one purchases a $500,000 property in Ontario the land transfer tax will be $6475.00

A first time home buyer will receive a rebate of $4000.00

If one purchases a $500,000 property in Toronto the land transfer tax will be $12,900.00 ($6475 for Ontario + $6475 for Toronto)

A first time home buyer will receive a rebate of $8,475.00

Formulas and Calculators

For a calculator that will work out these values for you automatically, try the land transfer calculator on my website, or if you want to work them out for yourself below are the formulas.

They’re additive, so the Ontario tax on a $500,000 home is:
($55,000 x .005) + ($195,000 x .01) + ($150,000 x .015) + ($100,000 x .02), or $6,475.

If the property is in Toronto then the total land transfer tax would be $12,950 ($6,475 for Ontario + $6,475 for Toronto).

Ontario

  • Up to and including $55,000.00 X 0.5% of total property value
  • From $55,000.01 to $250,000.00 X 1% of total property value
  • From $250K to $400K at 1.5% of total property value
  • From $400K to $2M at 2%.
  • The balance greater than $2M is taxed 2.5%.

Toronto

  • Up to and including $55,000.00 X 0.5% of total property value
  • From $55,000.01 to $400,000.00 X 1% of total property value
  • From $400,000.00 to $2,000,000 X 2% of total property value
  • From $2,000,000.01 to $3,000,000.00 at 2.5%
  • From $3,000,000.01 to $4,000,000.00 at 3.5%
  • From $4,000,000.01 to $5,000,000.00 at 4.5%
  • From $5,000,000.01 to $10,000,000.00 at 5.5%
  • From $10,000,000.01 to $20,000,000.00 at 6.5%

As always, if you have any questions or would like further information, please don’t hesitate to ask.

Simon