Whenever you buy a piece of land or an interest in Ontario, you have to pay the province’s land transfer tax. Buildings, buildings that are not yet constructed, and fixtures such as cabinetry and lighting are included under the term “land.”
Who has to pay a land transfer tax?
Anybody who acquires a piece of land or a beneficial interest in land must pay this tax to the province upon completion of the sale.
How much do I have to pay in land transfer taxes?
This figure is based on the amount that you paid for the land itself, as well as the remaining balance on any mortgage or debt that was accrued as a part of the arrangement when you bought the land. In some cases, land transfer taxes can be based on the fair market value of the land. Here are a few examples of when this might happen.
– When a lease is transferred with a remaining term that can exceed fifty years
– When land is transferred from a corporation to one of its shareholders
– When land is transferred to a corporation, as long as shares of the corporation are issued to the buyer
First-time home buyers
If you are buying a home for the first time, you could be eligible for a refund of at least part of the land transfer tax. Some people get a complete refund.
Paying land transfer taxes
Land transfer tax in Ontario can be paid when the transfer is registered. If the transfer is not registered within a month’s span, you must submit a Return on the Acquisition of a Beneficial Interest in Land form to the Ministry of Finance. This must be done within thirty days after the closing date.