By: Hani Al Olabi

What Is Land Transfer Tax In Ontario?

Tags: Informative, educational


2022/03/22 | Team Hani Al Olabi

Did You Know?

Over $2 Billion was paid in Land Transfer Tax within the Greater Toronto Area in 2021? 

What is Land Transfer Tax?
Whenever you purchase a house, condo, or land in Ontario, you are subject to Land Transfer Tax. This cost is often overlooked by buyers. We always encourage buyers to budget accordingly because this money must be paid in full at the time of title transfer and it cannot be added to the mortgage.

According to the Toronto Real Estate Board, the Average Sale Price in the GTA for 2021 was $1,095,475. This means that an average of $18,385 was paid in land transfer tax for each transaction made. However, if you are a first-time homebuyer, you will get a $4,000 instant rebate, lowering the amount to $14,385.

How Much Land Transfer Tax was Collected? 
In 2021, we had 121,712 transactions and according to Teranet, almost 24% of them were First Time Home Buyers. If we did the math for the sales in the GTA alone, the total land transfer tax collected is approximately $2,120,835,120. Outside of the GTA, the province of Ontario also received an additional amount of $1,769,164,880. 






What is Municipal Land Transfer Tax?
When you purchase in Toronto (North Border: Steeles Avenue, West Border: Etobicoke, East Border: Scarborough, and South Border: Lake Ontario), you are subjected to an additional Municipal Land Transfer Tax. In 2021, the City of Toronto collected a total of $697,690,000. 

What is the Money Used For?
This money is used to support investments & programs in education, health care, transportation infrastructure, and skilled trades.

2022 Land Transfer Tax Projections
According to RE/MAX, we're expecting a 10% increase in sale price in 2022, so if we keep the same number of transactions, this will lead to an increase of $266,549,280 in land transfer tax.

If you have any questions about land transfer tax or real estate in general, don't hesitate to reach out to our team, we are always happy to help. 
You can reach me directly at 647-298-7500 or by scheduling a meeting with me.

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Sources:
TRREB Market Watch
Ontario Budget 2021
City of Toronto Budget 2021
Teranet Market Insights