Every province and territory in Canada has some tax or fee whenever you purchase a home. You should take this into account with respect to your expenses. Your realtor fees and this land transfer tax are the two biggest expenses after the cost of your home. Mortgage insurance only applies if you’re required to take it, in which case, insurance would be the third largest cost or possibly second. Below is a summary of the land transfer tax in Ontario.
|Up to $55,000||0.5% of property value|
|Over $55,000 to $250,000||1% of property value|
|Over $250,000 to $400,000||1.5% of property value|
|Over $400,000||2% of property value|
Toronto Land Transfer Tax
Toronto is the only city in Canada that applies a land transfer tax to it’s residents. In fact, according to an article I read in the National Post, we’re the only city in North America that has a tax like this and it’s no chump change. I remember when I bought my 2nd home and (if I recall correctly) I had to pay just under $15,000 in taxes for about a $500k townhome. If I was in any other city in Canada, I would have only paid half of that. You’d think with revenue like that and considering we’re the fastest growing city in the world with respect to house prices, our city would be filthy rich. We’ve had this tax since 2008 and according to an article in the Toronto Star, in 2011 and 2012 we racked up $800 million in debt. In 2016, our mayor John Tory announced that he discovered $1 billion dollars in undeclared debt! Yeah, that’s right, $1 billion dollars according to a headline in CityNews. I recall scandals like that with the province or federal level. But, the city?
I digress because I despise this tax since we’re still incurring massive debt. Torontonians love to brag we’re an amazing world-class city. Well, if you’re going to do something that is a “first”and also be the only one to do so in North America, a massive tax like this shouldn’t be one of them! If increasing revenue doesn’t cure our woes, the other option has to do with expenses. It’s basic accounting and common sense logic. It doesn’t take another study and maybe another department of tons of employees to understand, revenue has to exceed expenses over the long run.
Anyways, here is how you calculate the one and only, Toronto Land Transfer Tax. It almost replicates the Ontario Land Transfer Tax.
|Up to and including $55,000.00||0.5% of total property value|
|From $55,000.01 to $400,000.00||1% of total property value|
|Over $400,000.00||2% of total property value|
For more information such as official rates and calculations, rebates, and refunds, see the Ontario Government website.
Leave a Reply