Land Transfer Tax

When you buy land or an interest in land in Ontario, you pay Provincial Land Transfer Tax.  It is due at the time the property is registered and the transaction closes.

Ontario Land Transfer Tax is calculated on a graduated scale ranging from 0.5% to 2%: the more expensive the home, the higher the rate of tax you pay. 
Here are 3 examples of home values and the Land Transfer Tax due:

Home Price                         Land Transfer Tax
$500,000                              $6,475
$750,000                              $11,475
$1,000,000                           $16,475

If the home you are purchasing is in the city of Toronto, you also pay an identical Municipal Land Transfer Tax, which doubles the amount of LTT due upon closing.

If you are a first-time home buyer, you may be eligible (based on a specific list of criteria) to claim a refund of up to $4,000.00. 

Obviously, the Land Transfer Tax can add a significant amount to your closing costs, on top of legal fees, mortgage insurance, title insurance and HST.  Seek professional advice and make sure you budget accordingly!