February 15, 2017
Author: Zale Skolnik
2017 Land Transfer Tax Increase and Update
With a new year comes new rules and new taxes. The year of Trump and the rooster has also seen developments in the Land Transfer Tax (“LTT“) system administered by the Province of Ontario.
Ontario Land Transfer Tax is assessed at different percentages for different purchase price points. The updated regime is as follows:
|Purchase Price||LTT payable (%)|
|Amounts up to and including $55,000||0.5%|
|Amounts exceeding $55,000, up to and including $250,000||1.0%|
|Amounts exceeding $250,000, up to and including $400,000||1.5%|
|Amounts exceeding $400,000 (for property other than property with one or two single family residences (ie. commercial))||2.0%|
|Amounts exceeding $400,000, up to and including $2,000,000 (for property with one or two single family residences)||2.0%.|
|Amounts exceeding $2,000,000 (for property with one or two single family residences)||2.5%|
Our clients involved in commercial real estate should note that prior to the amendments of this year, any purchase price for commercial property in excess of $250,000 faced a maximum LTT levy of 1.5%. The amended legislation creates an increased amount of LTT payable (2%) in respect of a purchase price for commercial property in excess of $400,000.
The new rates are relevant to our clients purchasing properties under agreements of purchase and sale dated any time after November 14, 2016.
At present, the municipal land transfer tax regime has not followed suit with the Province’s increases; however, if history is any indication, we should expect Toronto to announce corresponding increases in the coming year.
Other noteworthy amendments have been made to the LTT regime in respect of first time homebuyer rebates. For more information concerning the consequences of these amendments as they relate to residential real estate, please refer to Daniel Goldgut’s post in SUCCESSion: Tax & Estate Matters.