As of January 1, 2017, there are new land transfer tax (“LTT”) tax rates applicable to the purchase of land (residential and commercial) in Ontario. The new tax rates are as follows:

Value of the Land

Rate

Amounts up to and including $55,000.00

0.5%

$55,000.01, up to and including $250,000.00

1.0%

$250,000.01 up to and including $400,000.00

1.5%

Amounts over $400,000

2.0%

Where the land contains one or two single family residences, and the amount is over $2,000,000.00

2.5%

The new tax rates apply to all purchases of land where: (1) the agreement of purchase and sale was entered into after November 14, 2016; and (2) the transaction closes on or after January 1, 2017.

A Comparison of the old and new LTT rates (applicable to properties not in Toronto)

Sample LTT calculation using old LTT rates

Value of Land

LTT Rate

Sample LTT Calculation

Up to and including $55,000.00

0.5%

Amount x .005

Consideration $55,000.00

($55,000.00 x .005 = $275.00)

$55,0001.00 to $250,000.00

1.0%

Amount x .01 minus $275.00

Consideration $250,000.00

($250,000.00 x .01 minus $275.00 = $2,225.00)

Over $250,000.00

1.5%

Amount x .015 minus $1,525.00

Consideration $375,000.00

($375,000.00 x .015 minus $1,525.00 = $4,100.00)

Over $400,000.00

where land contains one or two single family residences

2.0%

Amount x .02 minus $3,525.00

Consideration $500,000.00

($500,000.00 x .02 minus $3,525.00 = $6,475.00)

Sample LTT calculation using new LTT rates

Value of Land

LTT Rate

Sample LTT Calculation

Up to and including $55,000.00

0.5%

Amount x .005

Consideration $55,000.00

($55,000.00 x .005 = $275.00)

$55,0001.00 to $250,000.00

1.0%

Amount x .01 minus $275.00

Consideration $250,000.00

($250,000.00 x .01 minus $275.00 = $2,225.00)

$250,001.00 to $400,000.00

1.5%

Amount x .015 minus $1,575.00

Consideration $375,000.00

($375,000.00 x .015 minus $1,525.00 = $4,100.00)

Over $400,000.00

2.0%

Amount x .02 minus $3,525.00

Consideration $500,000.00

($500,000.00 x .02 minus $3,525.00 = $6,475.00)

Over $2,000,000.00

where land contains one or two single family residences

2.5%

Amount x .025 minus $13,525.00

Consideration $3,000,000.00

($3,000,000.00 x .025 minus $13,525.00 = $61,475.00)