Details of Approved Toronto Land Transfer Tax
October 23, 2007 -- Toronto City Council has approved a municipal land transfer tax that will be levied on top of the provincial land transfer tax. The Toronto Real Estate Board took a strong position to oppose this tax as unfair in principle and refused to compromise .As a direct result of this strong position, City Council was forced to make a number of amendments to the City's original proposal, including rebates for first-time buyers, a reduced rate, and grandfathering for existing transactions.
The City has not yet provided detailed information on administration or implementation issues. The following is based on currently available information.
What was approved by City Council?
A second land transfer tax, on top of the provincial land transfer tax, at the following rates:
Residential:
- 0.5% of the amount of the purchase price up to and including $55,000
- 1% of the amount of the purchase price between $55,000 and $400,000
- 2% of the amount of the purchase price above $400,000
Commercial / Industrial / Etc.:
- 0.5% of the amount of the purchase price up to and including $55,000
- 1% of the amount of the purchase price between $55,000 and $400,000
- 1.5% of the amount between $400,000 and $40 million
- 1% of the amount above $40 million
Are existing transactions grandfathered?
Yes. Any transactions where the purchaser and vendor have entered into an Agreement of Purchase and Sale for the property prior to December 31, 2007 will be rebated the full amount of the Toronto land transfer tax. The City has not yet provided clarification on how rebates will be administered. If your clients have concerns, they should check with their lawyer. Once the City of Toronto provides clarification, more information will be provided.
Where does this apply?
The Toronto land transfer tax only applies to transactions within the City of Toronto. This does NOT apply to property transactions outside of the City of Toronto.
Are first time home buyers affected?
First time home buyers of new AND re-sale homes will receive a rebate of the Toronto land transfer tax of up to $3,725 (this equals a 100% rebate on homes purchased for up to $400,000). The City has not yet provided clarification on how rebates will be administered. If your clients have concerns, they should check with their lawyer. Once the City of Toronto provides clarification, more information will be provided.
More detailed information will be provided once it is made available by the City. If you have questions, contact the City of Toronto at Access Toronto at 416-338-0338.
If you would like further infomation on this tax or any other real estate related issues, please contact me via email at stephen@stephenpointer.com or call on my direct line at 416-992-7375.
