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[BUYING AND SELLING REAL ESTATE IN CANADA - ONTARIO]
subject to land transfer taxes as set out below. The seller is typically responsible for their own legal fees and the agent/brokerage commission, if applicable. Land Transfer Tax A buyer in Ontario is required to pay a land transfer tax on the registration of any transfer/deed. For commercial properties, the tax is currently calculated at the following rates: - one-half of 1% on the first $55,000 of the purchase price; - 1% on the balance of the purchase price up to and including $250,000; - 1.5% on the balance of the purchase price up to and including $400,000; and - 2% on the balance of the purchase price at $400,001 and above. For residential properties, the tax is calculated at the same rates as for commercial properties, except where the land contains one or two single-family dwellings and the property is valued at more than $2,000,000. For such transactions, the 2% tax rate only applies from $400,001 up to and includes $2,000,000, and a 2.5% tax rate applies to the balance of the purchase price for the property. In the City of Toronto, a municipal land transfer tax is also due on the registration of a transfer/deed in addition to the provincial land transfer tax. This municipal land transfer tax is calculated as follows: - for properties containing at least one but no more than two single-family residences, one-half of 1% on the first $55,000 of the purchase price, 1% on the balance of the purchase price up to and including $250,000, 1.5% on the balance of the purchase price up to and including $400,000, 2% on the balance of the purchase price up to and including
$2,000,000, and 2.5% on the balance of the purchase price at $2,000,001 and above; and - for all other properties, one-half of 1% on the first $55,000 of the purchase price, 1% of the balance of the purchase price up to and including $250,000, 1.5% of the purchase price up to and including $400,000, and 2% on the balance of the purchase price at $400,001 and above. First-time homebuyers (buyers that have not owned real estate anywhere else in the world) may be eligible for a refund of all or part of the tax, up to a limit. Certain transfers, such as between spouses for no consideration, may be exempt from the tax. Non-Resident Speculation Tax Effective April 21, 2017, and recently amended on October 25, 2022, 2022 a non-resident speculation tax (NRST) of 25% has been imposed on the purchase or acquisition of an interest in a residential property located in the Province of Ontario by an individual or corporation controlled by a person who is not a citizen or permanent resident of Canada or by foreign corporations and taxable trustees. The NRST applies to the transfer of “designated land ,” which is considered land that contains at least one and no more than six single family residences. The NRST is owed in addition to the land transfer tax in Ontario and Toronto, if applicable, and applies to the value of the consideration for a transfer of residential property. The transfer contains statements identifying whether the transfer is subject to the NRST and applicable explanations. XIV. CLOSING DOCUMENTS Some examples of commonly used documents on the closing of the residential transaction are:
ILN Real Estate Group – Buying and Selling Real Estate Series
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