Property Transfer (or Purchase) Tax / Land Transfer Fees

Property Transfer (or Purchase) Tax / Land Transfer Fees are calculated between 0.5-2% of the property’s total value (Land Transfer Tax is not applicable in some other provinces). They are generally 1% of the first $200,000 of the value and 2% of the remainder.

Since year 2005 the individuals who are buying their first home and now exempted from Property Transfer Tax (PTT) as long as they meet the following criteria, namely the First Home Buyer:

  • is a Canadian citizen or Permanent Resident
  • has to file two Canadian tax returns within the last six years
  • must occupy the property as their principal residence for the first year of ownership.
  • has never owned a home anywhere in the world
  • has to reside in the Province of Ontario for at least one year immediately prior to purchase

There are also proportional exemptions to PTT for first-time home buyers which vary by region based on the fair market value of the property.

Commencing December 2007, first home buyers are entitled to exemption of the provincial Land Transfer Tax (up to $2,000) regardless whether they purchase as resale real estate property or a home from the builder.

Commencing February 2008, the city of Toronto (as its own Land Transfer Tax which allows first time home buyers of both new and resale homes to qualify for a rebate.

If the property is vacant land, the house must be constructed within one year of closing and the buyer must live in the house for the balance of the year.

There are other criteria needed as well to qualify for the PTT exemption, so it is best to consult a lawyer or notary.