A cost some buyers are unaware of, Land Transfer Tax differs between provinces and cities. We break down what you need to know about Land Transfer Taxes for buying a home in Uxbridge below, so you know exactly what to expect.
What is Land Transfer Tax?
Buyers in most areas will have to add Land Transfer Taxes to their closing costs.
These taxes which are levied on properties that are changing hands, are the responsibility of the buyer. Ontario taxes can range from 0.5% to 2.5% of the total purchase price of the property.
This multi-tiered taxation system can sometimes be difficult to understand.
For example, if you buy a property for $500,000 in Ontario:
- 0.5% is charged on the first $55,000
- 1% is charged on the portion from $55,000 – $250,000
- 1.5% is charged on amounts from $250,000 – $400,000
- 2% is charged on $400,000 – $2,000,000
In this example your total provincial tax bill would be $6,475.00.
Keep reading these posts next for more helpful home-buying tips and advice:
- Mortgage Types, Terms, and Fees to Know
- Get to Know the Professionals on Your Home-Buying Team
- 4 Things to Know Before Making an Offer
Ontario Tax Rates
Effective January 1, 2017, the following are the Provincial rates for land transfer tax:
- 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, up to and including $2,000,000 = 2.0%
- amounts exceeding $2,000,000, where the land contains one or two single family residences = 2.5%.
First-time homebuyers may be eligible for a refund of all or part of the Provincial tax. To see if you qualify, visit Ontario’s Rebate Program.
Buying a Property in Toronto?
If you are purchasing a home in Toronto, there is an additional municipal land transfer tax. Toronto’s land transfer tax applies to properties purchased within the following boundaries: Steeles Avenue as the North border, Etobicoke as the West border, Scarborough as the East border and Lake Ontario as the South border.
The following Tax Rates apply to properties purchased in Toronto with a closing on or after March 1, 2017:
- 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, up to and including $2,000,000 = 2.0%
- amounts exceeding $2,000,000, where the land contains one or two single family residences = 2.5%.
First-time homebuyers may be eligible for a refund of all or part of the Toronto tax. To see if you qualify, visit Toronto Rebate Opportunities. You can also estimate your costs using our helpful Buyer’s Calculator below:
Understanding all your potential costs before you even start house hunting is the key to a successful purchase, experience, and closing.
If you still have questions, you can reach out to us directly by calling 905.852.6143 or emailing Cindy@Cindywood.ca today!
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