Toronto City Council has approved a new land transfer tax to be levied on top of the current provincial land transfer tax. There are now new rates for both residential properties and commercial properties. For our purposes here, we will only discuss the new rates for residential. To see exactly how this new tax impacts you, please refer to the Land Transfer Tax calculator at www.NoHomeBuyingTax.com. The additional CIty of Toronto Land Transfer Tax is calculated as follows:
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
This tax will take effect starting on February 1, 2008 but if your agreement is made on or before December 31, 2007 you will be rebated the full amount of the Toronto land transfer tax - regardless of the closing date. Transactions closing before February 1, 2008 will not be charged the Toronto Land Transfer Tax no matter when the agreement was dated. Agreements signed after December 31, 2007 with a closing date after February 1, 2008 will be required to pay the full Toronto Land Transfer Tax.
First time buyers 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) If you require further clarification on this new tax, please call Access Toronto at 416-338-0338.