At the time of closing of a purchase transaction or acquire a beneficial interest in land, the buyer needs to pay land transfer tax to the province of Ontario.
Unless exempt under the Act, the Land Transfer tax is payable on all unregistered dispositions of beneficial interests in land including every conveyance of land presented for registration. Land includes buildings, lands, structures under construction, fully constructed structures, fixtures and any interest in them.
For the purpose of calculating Land Transfer tax, the value of consideration includes the purchase price, all outstanding liabilities, benefits conferred and all cost of upgrades. In few circumstances, the fair market value of the land is the basis for calculation of land transfer tax as outlined below:
- Transfer of lease with balance term exceeding 50 years
- Land transferred from a corporation to its shareholder
- If corporation shares are issued, transferring land to a corporation