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This Tax Could Cost You Thousands on Your Next Home Purchase…

July 14, 2017

Many future first time home-buyers call MonsterMortgage.ca and find out about a cost they hadn’t accounted for…


The Land Transfer Tax (LTT)! This is a cost due upon the closing of your next home purchase, so it’s worth planning for and discussing; however, all is not lost, as first-time home buyers have access to a Land Transfer Tax rebate (if you’re in B.C, Ontario or P.E.I) that other home-owners do not have access to. For the sake of this blog, we will be using Ontario focused scenarios.

Land Transfer Tax? Really?

Yes! (unless the property is located in Saskatchewan or Alberta), the LTT is an expense you must factor into account when closing on that great property you’ve had your eye on. This fee is due upon the closing of your home purchase and must be paid before the home is yours. This fee cannot be lumped in or added with your mortgage (although you could put down a lesser down-payment), but many first-time home buyers find themselves surprised when asked to provide thousands of dollars they may not have accounted for.


I’m in Ontario, how is the land transfer tax calculated?



Purchase Price of Property Marginal Tax Rate
First $55,000 0.5%
On $55,000 to $250,000 1%
On $250,000 to $400,000 1.5%
Over $400,000 2%


And what if I’m in Toronto?

You will have to add an additional municipal land transfer tax if your new property is located in the City of Toronto.


Calculating this tax is as follows:



Purchase Price of Property Marginal Tax Rate
First $55,000 0.5%
On $55,000 to $400,000 1%
Amount over $400,000 2.0%


How much of a rebate can I get?

If you’re in Ontario, you’re eligible to receive up to $2000.00 back in a rebate. If located in Toronto, you’re also eligible to receive an additional $3725.00 rebate off of the city’s municipal land transfer tax. After doing the math, the first $227,500 of your purchase price is free from land transfer taxes if you’re a first time home buyer, even in Toronto.

Do I qualifiy?

Here’s the criteria to qualify in Ontario:

– You must be at least 18 years of age
– You must occupy the property as your principal residence within nine months of the date of the purchase closing
– You must not of owned a home or interest in a property anywhere in the world
– You must claim this rebate within 18 months of purchasing a home

How do I apply?

Be sure to let your real estate lawyer know that you’re a first-time home buyer and they will be able to take care of the necessary paperwork.

Not sure if you qualify for any more first-time home buyer perks? Fill out the form at the top of the page and speak to a Mortgage Expert today who can tell you about all the first-time home buyer programs available so you can put more money in your pocket… and not your bank’s!