Canadian Provincial Land Transfer Taxes
When you buy a house, there are plenty of costs involved in the transaction aside from the purchase price. There are mortgage interest fees, home inspection fees, lawyer fees, and so on.
But one expense that many buyers may not be aware of is the Land Transfer Tax (LTT).
Each province in Canada – with the exception of Alberta and Saskatchewan who charge a lower “transfer fee” instead – charges this tax that is applicable to home purchase transactions. Some municipalities charge their own land transfer tax as well, giving buyers looking to purchase a house in these areas an additional cost to cover.
Let’s dig deeper into Land Transfer Taxes and to find out what you can expect to pay when you purchase a home in each province.
When applying for a mortgage, everyone should avoid these common application mistakes.
What Is a Land Transfer Tax?
When you buy land, you pay a Land Transfer Tax to the province where the transaction takes place. Land transfer taxes are based on the property value, so a higher purchase price will result in a higher LTT.
So, how are land transfer taxes calculated? As mentioned earlier, they’re based on the price of the home. Each province has its own rate that is charged against the property value to calculate how much buyers are responsible for paying in land transfer taxes.
Who Pays Land Transfer Tax in Canada?
Buyers are the parties in a real estate transaction who pay the land transfer tax – sellers don’t pay. These transfer taxes are paid on closing day when the title of the home is transferred into the buyer’s name.
First time home buyers, however, may be eligible for a rebate on the land transfer tax in certain provinces, either for a partial or full refund.
The following will outline the exact land transfer tax rates in each province to help buyers understand what they can expect to pay when buying in their respective provinces.
- 1% on the first $200,000
- 2% on the portion between $200,000 up to and including $2,000,000
- 3% on the portion greater than $2,000,000
- 2% on the portion greater than $3,000,000 if the property is residential
The province of Alberta doesn’t charge a land transfer tax to homebuyers. Instead, it charges separate land and mortgage registration fees of $50, plus $1 for every $5,000 of the property value. If there’s a home loan involved, buyers would be charged another $50, plus an additional $1 for every $5,000 of the loan amount.
Like Alberta, Saskatchewan doesn’t have a land transfer tax, but instead charges a title transfer fee to homebuyers that is calculated as follows:
- $0 for the first $1 to $500
- $25 on the portion between $501 to $8,400
- 0.3% on the portion over $8,401
In Manitoba, the land transfer tax fees are charged as follows:
- 0% On the first $30,000
- 0.5% on the portion between $30,001 to $90,000
- 1% on the portion between $90,001 to $150,000
- 1.5% on the portion between $150,001 to $200,000
- 2% on amounts exceeding $200,000
In addition to the land transfer tax, Manitoba also charges a transfer registration fee:
- $104 for electronic registration
- $109 for paper registration
In Ontario, land transfer rates are calculated as follows:
- 0.5% on amounts up to and including $55,000
- 1% on the portion between $55,001 and $250,000
- 1.5% on the portion between $250,001 and $400,000
- 2% on the portion between $400,001 and $2 million
- 2.5% on the portion exceeding $2 million if the land has one or two single-family homes
In addition to the Ontario Land Transfer Tax, buyers in Toronto will have another transfer tax to pay – known as the Municipal Land Transfer Tax (MLTT) – which has the same rates as the province of Ontario. So, essentially, the land transfer tax would be double when buying in Toronto.
Quebec’s land transfer tax calculations are based on the following:
- 0.5% on the first $50,000
- 1% on the portion between $50,001 to $250,000
- 1.5% on the amount exceeding $250,000
Like Toronto, Montrealers also have a separate municipal land transfer tax to pay in addition to the provincial land transfer tax. But unlike Toronto, Montreal’s tax calculations are a bit different from its province’s.
- 0.5% on the first $50,900
- 1% on the portion between $50,901 to $254,400
- 1.5% on the portion between $254,401 to $508,700
- 2% on the portion between $508,701 to $1,017,400
- 2.5% on amounts exceeding $1,017,400
The land transfer tax in New Brunswick is relatively straightforward. Currently, the transfer tax payable is 1% of the property value, according to the Real Property Transfer Tax Act.
Land transfer taxes in Nova Scotia work a bit differently than other provinces. In Nova Scotia, every municipality establishes its own land transfer tax – or “Deed Transfer Tax” – which ranges from 0.5% to 1.5% of the purchase price of a property:
- Annapolis – 0.5%
- Antigonish – 1% in the municipality of the County of Antigonish, and 1.5% in the Town of Antigonish 1.5%
- Cape Breton – 1.5%
- Colchester – 1.5%
- Cumberland – 1.5% in the Municipality of the County of Cumberland, 1.25% in the Town of Amherst, and 1% in the Town of Oxford
- Digby – 0.5% in the Municipality of the District of Clare, 1% in the Municipality of the District of Digby, and 1.25% in the Town of Digby
- Guysborough – 1% in the Municipality of the District of Guysborough, 1.25% in the Municipality of the District of St. Mary’s, and 0.5% in the Town of Mulgrave
- Halifax – 1.5%
- Hants – 1.5%
- Inverness – 1.5%
- Kings – 0% in the Municipality of the County of Kings and Town of Kentville, 1% in the Town of Berwick, and 1.5% in the Town of Wolfville
- Lunenburg – 1.5% in the Municipality of the District of Chester and Town of Bridgewater, 1.25% on the Municipality of the District of Lunenburg and Town of Mahone Bay, and 1% in the Town of Lunenburg
- Pictou – 1%
- Queens – 1%
- Richmond – 1.5%
- Shelburne – 1.5% in the Municipality of the District of Barrington, Municipality of the District of Shelburne, and Town of Lockeport, and 1% in the Town of Clark’s Harbour
- Victoria – 1%
- Yarmouth – 1%
Prince Edward Island
Prince Edward Island (PEI) has a land transfer tax rate of 1% of the purchase price or property value, whichever is greater. Otherwise, there is no land transfer tax applicable to property values of less than $30,000.
Newfoundland and Labrador
Newfoundland and Labrador’s land transfer tax is also known as the Registration of Deeds Act, which is calculated as follows:
- $100 for properties or mortgages less than $500
- $100 plus 40¢ for every $100 worth in property value
Rebates For First-Time Homebuyers
As mentioned earlier, certain provinces (as well as municipalities) offer a rebate on land transfer taxes for first-time homebuyers, including Ontario, British Columbia, and PEI.
Some of the most common issues first-time home buyers worry about, click here.
First‑time buyers who purchase a house with a value up to $368,000 will receive a rebate that covers the full amount of land transfer tax that they owe. For first‑time buyers who purchase a house with a price greater than $368,000, they will receive the maximum rebate of $4,000 and have to cover the remaining balance themselves.
Eligibility – The buyer must:
- Be a Canadian citizen or permanent resident of Canada
- Be older than 18 years of age
- Occupy the home within nine months of buying it
- Not have owned a home anywhere else in the world
- Not have a spouse who has owned a home while being your spouse
For more information about the first-time homebuyer land transfer tax refunds in Ontario, please check out the government’s website.
Buyers are eligible to receive a rebate of up to $4,475. The eligibility requirements are the same as the province requirements with the addition of the following:
- If the purchaser is not a Canadian citizen or resident but becomes one within 18 months of the transfer of the property, they can apply for the rebate.
Please take a look at the government of Toronto’s website for more details about the land transfer tax rebate.
In B.C. first-time homebuyers can qualify for either a full land transfer tax exemption or a partial exemption.
In order to receive a full rebate for the land transfer tax, the homebuyer must:
- Be a citizen or a permanent resident
- Have lived in British Columbia for the 12 months prior to the registration of the property
- Or, have filed a minimum of two B.C. income tax returns in the past six years
- Have never owned a principal residence in Canada or the rest of the world
- Have never taken advantage of a first-time homebuyers’ refund
And the property that was purchased:
- Must be in British Columbia
- Must be a principal residence
- Must have a fair market value of $500,000 or less
- Or, be 1.24 acres or smaller
If you do not meet the above requirements to receive a full exemption of the land transfer tax, you may be eligible to receive a partial refund, if:
- The fair market value of the property is less than $525,000
- The property is larger than 1.24 acres
- The property has another building in addition to the principal residence
The maximum refund that B.C first-time homebuyers can receive is $8,000. For a comprehensive look at the exact amount of land transfer tax you will need to pay based on the price of your property, please visit the Government of British Columbia’s website.
First- time homebuyers in Prince Edward Island are eligible to receive a full refund on their land transfer tax if the following requirements are met:
- The buyer is 18 years of age or older
- The buyer is a citizen or permanent resident
- PEI has been the principal residence of the buyer for at least the six previous months to the purchasing of the property
- Or, the buyer has filed two PEI tax returns in the six previous years to the purchasing of the property or the property in question has been the principal residence of the buyer for six months after the registration of the deed
- This must be the first principal residence for the buyer
- This must be the first time the buyer is taking advantage of a first-time homebuyers’ refund
- The property must be occupied by the buyer as their principal residence
For a more detailed look at the first-time homebuyer exemption for land transfer tax in PEI, please check out the government’s website.
There is so much to know about buying a home, as it’s not as straightforward as taking out a mortgage, signing a real estate contract, and walking away with the keys in hand. Land transfer taxes need to be understood and budgeted for. And for buyers who are purchasing in provinces or municipalities that offer a rebate, knowing that these refunds exist can help them save tens of thousands of dollars.
If you’re interested in apply for a mortgage, Loans Canada can help!
Rating of 5/5 based on 1 vote.