Land Transfer Tax Update

Municipal Land Transfer Tax

We are sure that you have all heard about our new municipal land transfer tax being put into effect. Here is an update and a decription of what is involved, who pays and how much. Here is a brief layout that should give you a better understanding of our new tax.

Residential: (An easy-to-use residential calculator is available at http://www.nohomebuyingtax.com/):

0.5% of the amount of the purchase price up to and including $55,000, plus
1% of the amount of the purchase price between $55,000 and $400,000, plus
2% of the amount of the purchase price above $400,000

When does this take effect?

February 1, 2008

Who has to pay?

Existing Transactions are grandfathered

Anybody who has Agreements of Purchase and Sale signed before December 31, 2007 with a closing date before February 1st 2008 will not be required to pay the tax.

If you have an Agreement of Purchase and Sale Signed before December 31 with a closing date after February 1st, 2008 then you will pay the tax at closing, but will be rebated the full amount.

If you have an Agreement of Purchase and Sale signed after December 31st but a closing date before February 1st, 2008 then you are not required to pay.

If you have an Agreement of Purchase and Sale signed after December 31st with a closing on or before February 1, 2008, you are required to be the full tax.

For First Time Buyers

A rebate of up to $3,725 will apply to first-time purchasers of both new and existing homes. This means a full rebate for first-time buyers of homes valued at $400,000 or less. For example, a first-time purchaser of a home valued at $600,000 would pay land transfer tax according to the scale shown above, and receive a rebate of $3,725. A first time home buyer of a home valued at $300,000 would get a full rebate on the land transfer tax.

For more detailed information, you can check out Toronto's website HERE.