Land Transfer Tax
Definition
Land transfer tax is a provincial (and sometimes municipal) tax charged on the value of property when ownership changes hands, payable in cash at closing.
How it works
The tax is calculated on a sliding scale against the purchase price, and the rates differ by province. British Columbia charges property transfer tax, Ontario charges provincial land transfer tax with Toronto adding a second municipal tax, and Alberta charges only much smaller land title registration and mortgage registration fees rather than a full transfer tax.
Rebates can materially reduce or eliminate the bill. British Columbia and Ontario both offer first-time buyer relief and newly built home exemptions with their own price thresholds and eligibility rules, and Toronto offers a separate municipal rebate.
This tax cannot be added to the mortgage. It must be paid from your own funds at closing, which is why it belongs in your closing cost budget from the very beginning.
Quick facts
- Charged provincially; Toronto adds a municipal tax on top.
- Alberta has registration fees instead of a transfer tax.
- First-time buyer and new-build rebates can apply.
Put this into practice
Still have questions about land transfer tax?
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