Details of Approved Toronto Land Transfer Tax

October 23, 2007 — Toronto City Council has approved a municipal land transfer tax that will be levied on top of the provincial land transfer tax.
The City has not yet provided detailed information on administration or implementation issues. More information on implementation will be available at the Executive Committee on October 29, 2007. The following is based on currently available information.

What was approved by City Council?
A second land transfer tax, on top of the current provincial land transfer tax, at the following rates:
2nd new Municipal Land Transfer Tax:
• 0.5% of the amount of the purchase price up to and including $55,000
• 1% of the amount of the purchase price between $55,000 and $400,000
• 2% of the amount of the purchase price above $400,000
Existing Provincial Land Transfer Tax:
• 0.5% of the amount of the purchase price up to and including $55,000
• 1,0% of the amount of the purchase price between $55,000 and $250,000
• 1.5% of the amount of the purchase price between $250,000 and $400,000
• 2.0% of the amount of the purchase price over $400,000

When does Toronto Land Transfer Tax take effect?

February 1, 2008.
Are existing transactions grandfathered?
Yes. Any transactions where the purchaser and vendor have entered into an Agreement of Purchase and Sale for the property prior to December 31, 2007 will be rebated the full amount of the Toronto land transfer tax. The City has not yet provided clarification on how rebates will be administered. If your clients have concerns, they should check with their lawyer. Once the City of Toronto provides clarification, more information will be provided.
What about Agreements of Purchase and Sale signed after December 31, 2007 with closing dates before February 1, 2008?
Purchasers with a Purchase and Sale agreement signed after December 31, 2007 with a closing before February 1, 2008 will not be required to pay the Toronto Land Transfer tax.

What about Agreements of Purchase and Sale signed after December 31, 2007 with closing dates on or after February 1, 2008?
Purchasers with a Purchase and Sale agreement signed after December 31, 2007 with a closing on or after February 1, 2008 will be required to pay the full Toronto Land Transfer tax.

Where does the Toronto land transfer tax apply?

The Toronto land transfer tax only applies to transactions within the City of Toronto. This does NOT apply to property transactions outside of the City of Toronto.

Are first time home buyers affected by Toronto land transfer tax?

First time home buyers of new AND re-sale homes will receive a rebate of the Toronto land transfer tax of up to $3,725 (this equals a 100% rebate on homes purchased for up to $400,000). The City has not yet provided clarification on how rebates will be administered. If your clients have concerns, they should check with their lawyer. Once the City of Toronto provides clarification, more information will be provided.

More detailed information will be provided once it is made available by the City. If you have questions, contact the City of Toronto at Access Toronto at 416-338-0338. Some information from the City is available here.

For all reports and presentations on the new Municipal Land Transfer Tax please visit:
http://www.toronto.ca/finance/revenue_tools.htm

For existing Provincial land transfer tax information please visit: http://www.rev.gov.on.ca/english/bulletins/ltt/2_2005.html

More Information on New Land Transfer Tax and Mississauga Real Estate
The original document was retrieved from the TREB website and modified for residential use. Although I Endeavour to ensure the accuracy and timeliness of information, it is not guaranteed. Therefore I do not accept any responsibility for any loss arising from any use or reliance on the information contained herein.

Posted by LJ- Guest Blogger in General Mississauga and Oakville Real Estate