MoneySense Toolkit: The land transfer tax calculator

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Land Transfer Tax Calculator

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Buying a home is an exciting process with many unexpected costs. Beyond your down payment, you’ll also be responsible for paying legal fees, appraisal costs, title transfer costs and taxes to the province or municipality (or both). 

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That last item is called a land transfer tax (LTT), except in the provinces of Alberta and Saskatechewan, which describe those costs as land transfer fees. Despite the differences in terminology, the idea is the same: the buyer pays a one-time tax to the local government every time a property changes hands. 

What is a land transfer tax?

Most of the time, LTT is calculated as a percentage of the home’s sale price and is due when you complete your home purchase. It’s part of your closing costs, which means you’ll need the cash on hand to pay for it at closing. 

You can use a land transfer tax calculator to estimate how much you’ll need to pay. Depending on your home’s value, LTT can easily cost thousands of dollars. The fees charged in Alberta and Saskatchewan are typically much smaller. 

How is land transfer tax calculated?

Every province in Canada charges some form of tax on property transfers, and some municipalities charge an additional tax, known as municipal land transfer tax (MLTT). 

Most provinces charge their tax as a percentage of the value of your home, and most tax rates are marginal, which means the size of the tax increases as the home’s value increases. You can look up how much you can expect to pay, depending on where in Canada your home is located, or use a land transfer tax calculator.

Alberta

Alberta is one of the few provinces in Canada that does not charge LTT. Instead, it charges a transfer of land registration fee and a mortgage registration fee. 

  • The transfer of land registration fee covers the administrative cost of changing the legal title of the land. The buyer is charged $50 plus $2 for every $5,000 of the value of the property.
  • The mortgage registration fee covers the issuance of the mortgage. The buyer is charged $50 plus $1.50 for every $5,000 of the principal mortgage amount.

British Columbia

When buying property in British Columbia, the amount of LTT is based on the value of the property. In B.C., buyers pay a marginal tax rate calculated as a percentage of the home’s value. The tax rates are: 

  • 1% on the first $200,000
  • 2% on the portion from $200,001 to $2,000,000
  • 3% on the portion from $2,000,001 to $3,000,000
  • 5% on any amount over $3,000,000

Manitoba

When buying a home in Manitoba, the LTT is based on the home’s value. Buyers also pay a flat registration fee. The marginal tax rates in Manitoba are: 

  • No tax on the first $30,000
  • 0.5% on the portion from $30,001 to $90,000
  • 1.0% on the portion from $90,001 to $150,000
  • 1.5% on the portion from $150,001 to $200,000
  • 2.0% on any amount over $200,000

New Brunswick

Property buyers in New Brunswick do not have to worry about a marginal tax rate. Instead, they are taxed at a flat rate of 1% of the value of the property. 

Newfoundland & Labrador 

In Newfoundland and Labrador, LTT is governed by the Registration Deeds Act. Under this act, buyers pay a transfer tax based on the following formulas:

  • $100 if the property value or mortgage is less than $500
  • $0.40 for every $100 of property value or mortgage over $500

Nova Scotia

In Nova Scotia, the province’s LTT is called the deed transfer tax (DTT). It varies from municipality to municipality, with most charging 1% to 1.5%. 

Ontario

Home buyers in Ontario pay a percentage of their home’s value as LTT. The tax rates are:

  • 0.5% on the first $55,000
  • 1.0% on the portion from $55,001 to $250,000
  • 1.5% on the portion from $250,001 to $400,000
  • 2.0% on the portion from $400,001 to $2,000,000
  • 2.5% on any amount over $2,000,000

There’s also a 15% non-resident speculation tax for anyone who is not a citizen or permanent resident of Canada but is buying property in the Greater Golden Horseshoe Region.

Prince Edward Island

In Prince Edward Island, the LTT is called the real property transfer tax (RPTT). It’s calculated as 1% of the property’s purchase price.

Quebec

Quebec’s LTT works differently than in most provinces, because it is calculated and collected by municipalities. All properties in Quebec are taxed based on their “base amount,” which is calculated as the greater of:

  • The home’s purchase price
  • The amount listed on the deed of sale
  • The value of the municipal assessment

Once the base amount is determined, the buyer pays LTT based on the following scale:

  • 0.5% on the first $50,000
  • 1.0% on the portion from $50,001 to $250,000
  • 1.5% on any amount over $250,000

Saskatchewan

Saskatchewan doesn’t charge LTT. Instead, the buyer pays a land title or abstract transfer fee. This fee may be bundled into the buyer’s legal fees and is charged based on the home’s value:

  • No fee if the value is less than $500
  • $25 fee if the value is between $501 and $8,400
  • 0.3% of the total value if it is $8,401 or more

Buyers also have to pay $166 to register the mortgage.

Northwest Territories

Those living in Canada’s territories must also pay LTT. In the Northwest Territories, for example, buyers pay both a land transfer fee and a mortgage fee. The Northwest Territory LTT is calculated based on the property’s value, for example:

  • $1.50 for each $1,000 in value up to $1,000,000, with a minimum fee of $100
  • $1,500 for properties valued up to $1,000,000 plus $1 for each $1,000 thereafter

The mortgage fee is calculated similarly:

  • $1.00 for each $1,000 in value, with a minimum fee of $80.00.

Nunavut

Nunavut is one of the more affordable places in Canada to buy a home. In this territory, buyers need to pay a fee to register the mortgage. The fee is $1 for each $1,000 of mortgage amount, up to a  minimum fee of $40.

Yukon

In the Yukon, buyers pay a transfer fee when transferring property from one individual to another, and it’s based on the value of the home. For properties valued at more than $25,000, buyers pay $0.25 for every $1,000 in value.

Buyers also pay a transfer fee, which is based on the price of the property.

  • $50 for properties valued at less than $100,000
  • $150 for properties valued from $100,001 to $500,000
  • $350 for properties valued from $500,001 to $3,000,000
  • $550 for properties valued from $3,000,001 to $10,000,000
  • $750 for properties valued at more than $10,000,000

Cities that charge land transfer tax

Toronto

While most Canadian cities do not charge homeowners municipal LTT, Toronto is an exception to this rule. Toronto’s MLTT applies to properties purchased within the City of Toronto only (meaning the region that stretches from Steeles Avenue to Lake Ontario and from  Etobicoke to Scarborough). The tax rates are: 

  • 0.5% on the first $55,000
  • 1.0% on the portion from $55,001 to $250,000
  • 1.5% on the portion from $250,001 to $400,000
  • 2.0% on the portion from $400,001 to $2,000,000
  • 2.5% on any amount over $2,000,000

MLTT is charged in addition to the taxes paid to the province of Ontario. 

Montreal

Like in the rest of Quebec, Montreal’s MLTT is based on the property’s “base amount,” which is calculated as the greater of:

  • The property’s purchase price
  • The amount on the deed of sale
  • The market value as determined by an assessment and increased by the following comparative factors:
  • 1.06 for properties sold in 2021
  • 1.00 for properties sold in 2020
  • 1.04 for properties sold 2019

Montreal differs from other municipalities in how it taxes properties. Since properties tend to have a higher value in Montreal than the rest of Quebec, there are additional tax rates for higher value properties.

Once the base amount has been determined, LTT is charged according to this schedule. The rates are revised every year: 

  • 0.5% on the first $52,800
  • 1.0% from $52,801 to $264,000
  • 1.5% from $264,001 to $527,900
  • 2.0% from $527,901 to $1,055,800
  • 2.5% from $1,055,800 to $2,041,900
  • 3% on any amount above $2,041,900

First-time homebuyer land transfer tax rebate

Anyone who buys property in Canada must pay LTT, so it’s essential to plan for this expense. That said, some first-time homebuyers qualify for rebates or relief programs depending on their location. Your land transfer tax calculator will automatically apply these rebates if you specify your province, but here is a complete list of the available rebates in Canada.

What is a first-time homebuyer rebate?

There are several first-time home buyer rebates available in Canada, including in Ontario, British Columbia, Prince Edward Island and Toronto. Here are the maximum rebates you can claim or receive in each of these regions:

  • Ontario: $4,000
  • British Columbia: $8,000 
  • Prince Edward Island: Full tax amount for homes under $200,000
  • City of Toronto: $4,475

These rebates are only available for first-time homebuyers. To qualify for these rebates, you must generally meet the following criteria:

  • You have never previously owned a home
  • You are a Canadian citizen or permanent resident of Canada.
  • You are purchasing a newly constructed or resale residential property
  • You are at least 18 years of age
  • You will occupy the home as your principal residence no later than nine months after purchase
  • If you have a spouse or common-law partner, they can not previously owned a home

The requirements listed above apply to all provincial rebates, but some provinces may have their own extra requirements. For example, in British Columbia, you’ll need to have lived in B.C. for at least a year before the date you register the property, and have filed at least two income tax returns as a B.C. resident. You should double check the requirements in your province.

Other land transfer tax exemptions

Some provinces, like Ontario, also have exemptions to what properties qualify for LTT. Here are some standard exemptions: 

  • Transfers between spouses
  • Transfers from an individual to their family business corporation
  • Transfers of farmland between family members
  • Transfers of a lease from a non-profit or charity
  • The breakdown of a marriage
You’re 2 minutes away from getting the best mortgage rates in CanadaAnswer a few quick questions to get a personalized rate quote

I’m buying a homeI’m renewing/refinancing

You will be leaving MoneySense. Just close the tab to return.

Other MoneySense mortgage calculators

  • Mortgage affordability calculator
  • Mortgage payment calculator
  • Mortgage down payment calculator
  • Mortgage penalty calculator
  • Mortgage refinance calculator
  • CMHC mortgage insurance calculator
  • Mortgage renewal calculator

The post MoneySense Toolkit: The land transfer tax calculator appeared first on MoneySense.

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