So you think you are ready to make that big purchase? 🏡Congratulations! Today I thought I would point out to you some of the benefits of buying a duplex as your first home. Maybe it's the
Land Transfer Tax - What you need to Know
Dated: December 1 2020
What on Earth is Land Transfer Tax? Who pays it and how much should you budget for?
Land transfer tax is a mandatory government tax payable to the provincial government in Ontario. Some cities, such as Toronto, also have an applicable municipal land transfer tax. Thankfully in Sudbury, a municipal land transfer tax is not applicable.
Buyers of houses or condos in Ontario pay this tax when they purchase a property
The seller is never responsible to pay land transfer tax.
If you are a first time home buyer, you may be eligible for an immediate refund of all or part of your land transfer tax (at least on the first $400,000 of your purchase price.)
** Many people ask if they can be exempt from paying land transfer tax if they have not purchased a home but their spouse had. The answer is NO, unfortunately. In this case, a married or common law couple is viewed as “one”and you can’t be exempt from the tax twice.
How much is the Land Transfer Tax?
The Ontario Land Transfer Tax is calculated as a percentage of the property purchase price and is based on a sliding scale system. This is a one time payment.
The 1st $55,000 of the purchase price is taxed at a rate of 0.5%
The next $195,000 of the purchase price ($55,000 to $250,000) is taxed at a rate of 1%
The next $150,000 (250,000-400,000) is taxed at a rate of 1.5%
The remaining amount will be taxed at a rate of 2% (400,000-2,000,000)
Anything over $2,000,000 will be taxed at a rate of 2.5%
If you are purchasing a home in Toronto, the municipal tax is calculated in the same way as the provincial tax, so you will be paying double.
How and When do you pay the tax?
The lawyer will add it into the closing costs when you purchase your home. It is paid on closing.
Emily got her start in the Real Estate industry in 2017 as an office administrator at Royal LePage North Heritage Realty, later obtaining her own real estate license in 2018. Through her in-depth mark....