August 9, 2019
When you acquire property or land, you pay land transfer tax to the province when the transaction closes. Land transfer taxes are taxes that are imposed by the Government of Ontario and municipal governments. The percentages range from 0.5 to 4.0 of the total amounts of the property and are paid only by the person or persons buying the house.
These taxes are only paid when you are buying a house, not selling it. Many provinces have different percentages, but they all range from 0.5% to 3% (approx.). It is mandatory that you pay them when you buy your new home.
If you are buying your first house, depending on your province, you may be entitled to a rebate. In Ontario, the maximum rebate you are eligible for is $4,000. If you are a first-time buyer, but your spouse isn’t, you will be able to get a rebate based on the percentage of the house that you own. If you are a single parent purchasing your first home, you may be entitled to the first-time buyer’s rebate.
If you are the seller of the house, any kind of Land Transfer Taxes does not apply to you. These taxes are only applicable to the new owners of the house.
Land transfer taxes provide the province of Ontario enough funds which can then be used to improve roadways, infrastructure, public transit, employment opportunities and affordable housing. If you need further help understanding the ins and outs of land transfer tax and how it applies to you, contact Mortgage Forces today for more information!