Ontario Land Transfer Tax

A magnify glass on top of house shape stickers, three stickers are in red with dollar sign, tax and percentage on them.

Who Pays The Ontario Land Transfer Tax? Home Buyers Or Home Sellers?

The simple answer to that question is the home buyer is 100 percent responsible for paying the Ontario land transfer tax for the purchase of a condo or house in Ontario.

But did you know that home buyers are taxed twice for the privilege of purchasing a Toronto house or condo? The home buyer must pay a municipal and a provincial land transfer tax.

How Much Is The Ontario Land Transfer Tax?

There is a basic formula used to calculate the land transfer tax based on the purchase price and there are plenty of Ontario land transfer tax calculators to help you figure out the exact cost for your own home purchase to ensure you’re prepared to cover the fee.

For example, if you purchased a $1 Million dollar home in Toronto, the total land transfer tax to be paid would be $32,950 on top of the purchase price. That’s more than 3 percent of the total home price.

Making things worse for all home buyers, the tax must be paid at closing. You can’t write off land transfer taxes either. And it can’t be rolled into your mortgage to finance the payments over years or decades.

So you’re basically just handing over a large bag of cash to the Ontario government for the privilege of being able to buy a property in Ontario.

What about First Time Home Buyers?

It should be noted however that first-time buyers in Toronto do receive a little relief in the form of tax rebates, receiving up to a maximum of $4,000 from the province and $4,475 from the City of Toronto. But that’s it. And it’s a one time deal only for first time buyers.

The greatest irony regarding the Ontario land transfer tax is that it’s a steep fee to pay for the privilege of buying a home in Ontario while the provincial and municipal governments repeatedly claim to be working on solutions to promote housing affordability. It doesn’t seem very affordable to me.

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