On October 23, 2007, the City of Toronto (416 telephone area code being bounded by Steeles on the North, Western boundary of Etobicoke, Eastern boundary of Scarborough and Lake Ontario’s shoreline on the South) approved a municipal Land Transfer Tax that will be levied in addition to the current Ontario provincial Land Transfer Tax to be effective for closings on and after February 1, 2008.
The Toronto City Land Transfer Tax is as follows:
0.5% of the amount of the purchase price up to $55,000.00
1.0% of the purchase price between $55,000.00 and $400,000.00
2.0% of the purchase price above $400,000.00 (for residential properties)
The formula (for a home purchase) for City of Toronto Land Transfer Tax will be as follows:
– up to $55,000: multiply price x 0.5%
– from $55,001 to $400,000: multiply price x 1.0% and deduct $275
– for a price over $400,000: multiply price x 2.0% and deduct $4275.00
if the property purchased has more than two residential units or is a commercial property and the price exceeds $400,000, multiply the total price x 1.5% and deduct $2,275.00)
Calculate your Toronto City Land Transfer Tax (based on a purchase of a resale residential home):
SPECIAL NOTES REGARDING TORONTO LAND TRANSFER TAX
- The Toronto City land transfer tax becomes effective on February 1, 2008 and does not affect any City of Toronto property purchase closed prior to February 1, 2008. A buyer will only pay the standard Ontario government land transfer tax (see “ LAND TRANSFER TAX: ONTARIO”) for any Toronto property purchase closed before February 1, 2008.
- Where the City of Toronto property purchase agreement is signed ON OR BEFORE December 31, 2007, and the closing is AFTER February 1, 2008, a purchaser will be entitled to a full rebate of the Toronto City land transfer tax paid on closing.
- Where the City of Toronto property purchase agreement is signed AFTER December 31, 2007, and the closing is AFTER February 1, 2008 the full tax is payable.
- If the buyer of property in the City of Toronto is a qualified first time buyer (and this applies to both builder and resale deals) then such buyer is entitled to a REBATE up to a maximum amount of $3,725.00, being the tax on the value of a home in the amount of $400,000.00. In other words, a first time buyer buying a home for $400,000.00 (or less) is entitled to a full rebate of the City of Toronto Land Transfer Tax. If the Toronto first time buyer’s purchase price is $400,000 (or less), NO Toronto land transfer tax need be paid if a full rebate is available. If the price exceeds $400,000 and the first time buyer is entitled to ONLY a partial rebate of Toronto Land Transfer Tax (since maximum 1st time buyer rebate is only $3,725.00), then the full Toronto Land Transfer Tax must be paid on closing and a partial refund application is to be made by the buyer after the transaction closes; this same rule applies, (no matter what the price) if there are 2 or more named buyers and only one is a first time buyer.
- No Toronto Land Transfer Tax is payable if the total Toronto Land Transfer Tax is less than $72 (for example, if only a condo parking or locker is being bought with a purchase price of less than $14,400)
IN ADDITION TO Toronto Land Transfer Tax (for property purchased in TORONTO), a buyer typically must ALSO pay the added Ontario Land Transfer Tax. For calculations of such tax, go to the link: Land Transfer Tax: Ontario