Information on the City of Toronto Land Transfer Tax
Further to our update on the new Toronto Land Transfer Tax, please find below more detailed information on the tax, in particular regarding signing dates of purchase and sale agreements, which has recently been released.
The new land transfer tax takes effect on February 1, 2008. More details on implementation will be available after the Executive Committee of City Council meeting on October 29, 2007.
For all purchasers, the new Toronto Land Transfer Tax will be the following (in addition to the existing provincial Land Transfer Tax) :
- One-half of one percent of the value of the consideration on sales up to and including $55,000;
- One per cent of the value of the consideration on sales exceeding $55,000 up to and including $400,000;
- Two per cent of the value of the consideration of land containing one and/or two single family residences exceeding $400,000;
* One and a half per cent of the value of the consideration on commercial properties including multi-residential units exceeding $400,000 up to $40 million;
* One per cent of the value of the consideration which exceeds $40 million.
Where the net revenue after transaction fees would result in revenue to the City of less than $2.00, the purchase would be exempt from the Toronto Land Transfer Tax. Combined with Teranet fees, this totals approximately $72 of tax, which provides an exemption for property of $14,000 or less. We understand that the intent is to exempt parking spaces that cost under $14,000 from the land transfer tax.
Purchasers with a Purchase and Sale agreement entered into on or before December 31, 2007 will receive a full rebate of the Toronto Land Transfer tax regardless of the closing date.
Purchasers with a Purchase and Sale agreement entered into after December 31, 2007 with a closing before February 1, 2008 will not be required to pay the Toronto Land Transfer tax.
Purchasers with a Purchase and Sale agreement entered into after December 31, 2007 with a closing on or after February 1, 2008 will be required to pay the full Toronto Land Transfer tax.
For first time purchasers:
A rebate of up to $3,725 will apply to first-time purchasers of both new and existing homes. This means a full rebate for first-time buyers of homes valued at $400,000 or less. For example, a first-time purchaser of a home valued at $600,000 would pay land transfer tax according to the scale shown above, and receive a rebate of $3,725. A first time homebuyer of a home valued at $300,000 would get a full rebate on the land transfer tax.