Buying property in Canada comes with many upfront costs and taxes, including the Land Transfer Tax (LTT). Understanding how the LTT works, including the rates in your province, is essential to budgeting for a real estate purchase. This guide provides an in-depth look at land transfer tax across Canada.
What is Land Transfer Tax?
Land transfer tax, sometimes called property transfer tax, is a one-time tax levied by provincial governments when purchasing a home or land. The tax is calculated as a percentage of the property’s sale price and paid by the buyer.
Land transfer tax rates vary widely across Canada. Some provinces have graduated tax brackets similar to income tax, while others charge a flat percentage. Major cities like Toronto and Montreal also levy their municipal LTT on top of the provincial rates.
How is Land Transfer Tax Calculated in Canada?
Land transfer tax is calculated as a percentage of the purchase price and scales higher based on property value. Rates vary widely across provinces and territories. Here is an overview of how this tax is calculated in each region of Canada.
Ontario
Ontario charges land transfer tax using a graduated bracket system based on the property’s value:
- 0.5% on the first $55,000
- 1.0% on the amount greater than $55,000 to $250,000
- 1.5% on the amount greater than $250,000 to $400,000
- 2.0% on the amount greater than $400,000 to $2 million
- 2.5% on amounts over $2 million for single-family homes
There is also an additional 15% Non-Resident Speculation Tax for foreign buyers in the Greater Golden Horseshoe.
This is an example of calculating your LTT for a $700,000 property in Ontario:
| Marginal Purchase Price ($) | Tax Rate | Marginal Tax ($) |
|---|---|---|
| First 55,000 | 0.5% | 275 |
| The next 195,000 (55,000 to 250,000) | 1.0% | 1,950 |
| The next 150,000 (250,000 to 400,000) | 1.5% | 2,250 |
| The remaining 300,000 (400,000 to 2,000,000) | 2.0% | 6,000 |
| 0 (Over 2,000,000) | 2.5% | 0 |
The total tax is $10,475. If you are a first-time home buyer, you can receive a rebate of up to $4,000 on your provincial land transfer tax, making the net LTT $6,475.
British Columbia
The tax brackets for BC Land transfer tax, or BC property transfer tax, are:
- 1% on the first $200,000
- 2% on the amount over $200,000 to $2 million
- 3% on the amount over $2 million
- An additional 2% on the amount above $3 million
Manitoba
Manitoba Land Transfer Tax rates are as follows:
- 0.5% on values from $30,001 to $90,000
- 1.0% on the amount over $90,000 to $150,000
- 1.5% on the amount over $150,000 to $200,000
- 2.0% on amounts over $200,000
Quebec
Quebec Land transfer tax, known as the Welcome Tax, scales from:
- 0.5% on the first $53,200
- 1.0% from $53,200 to $266,200
- 1.5% on amounts above $266,200
Montreal has additional brackets with higher rates.
Newfoundland and Labrador
In Newfoundland and Labrador, the Land Transfer Tax is calculated as follows:
- $100 for the first $500 of the purchase price
- $0.40 for every additional $100 of the purchase price (rounded down)
Prince Edward Island
Prince Edward Island charges a Real Property Transfer Tax of 1% on the greater of the purchase price or the assessed value of the property. Properties valued under $30,000 are exempt from this tax.
Nova Scotia
Nova Scotia has its own Deed Transfer Tax, ranging from 0.5% to 1.5% of the purchase price. Non-residents of Nova Scotia, including Canadians from other provinces, must pay a Non-resident Deed Transfer Tax (also known as the Provincial Deed Transfer Tax) of 5% on the property’s purchase price or assessed value. This tax applies to residential properties with three or fewer units and is effective as of April 1, 2022.
Which Provinces Do not Have Land Transfer Taxes?
When buying a property in Canada, a Land Transfer Tax must be paid to the province where the property is located, except in Alberta, Saskatchewan, Northwest Territories, and Yukon.
Alberta
Alberta has no land transfer tax. However, Alberta charges a Property Registration Fee consisting of two components:
- Alberta Land title fee: A flat $50 fee plus $5 for every $5,000 of property value
- Alberta Mortgage registration fee: A flat $50 fee plus $5 for every $5,000 of mortgage value
This fee is the latest update from the Alberta Land Titles Office (effective January 31, 2025). The total registration fee is the sum of these two components.
Saskatchewan
Saskatchewan charges a Land Title Transfer Fee equal to 0.4% of the property value for properties over $6,300. A flat fee of $25 applies to properties valued between $500 and $6,300, while properties under $500 are exempt from the fee.
If a mortgage is obtained to purchase the property, a flat mortgage registration fee based on the mortgage amount will also be payable.
Northwest Territories
The Northwest Territories does not have a Land transfer tax but charges two fees:
- Registration Fee: $1.50 for every $1,000 of property value (minimum $100) for properties under $1,000,000, and $1 for every $1,000 over $1,000,000
- Mortgage Fee: $1 for every $1,000 of the mortgage amount (minimum $80)
Yukon
Yukon does not have a Land Transfer Tax but charges three flat fees:
- Assurance Fee: Applicable if the property value has increased since the last ownership transfer
- Transfer Fee: Ranges from $50 for properties under $100,000 to $650 for properties over $10,000,000
- Mortgage Fee: Similar to the Transfer Fee, based on the mortgage amount
Municipal Land Transfer Tax
In addition to provincial taxes, some cities levy their own municipal taxes:
Toronto
The City of Toronto charges an additional municipal tax over the provincial tax. Toronto Land Transfer Tax matches the Ontario brackets but adds an additional tax for homes over 3 million, effective as of January 1, 2024.
- 0.5% on the first $55,000
- 1.0% on the amount from $55,000 to $250,000
- 1.5% on the amount from $250,000 to $400,000
- 2.0% on the amount exceeding $400,000
- 2.5% on amounts over $2 million
- 3.5% on the amount from $3 million and up to $4 million
- 4.5% on the amount from $4 million and up to $5 million
- 5.5% on the amount from $5 million and up to $10 million
- 6.5% on the amount from $10 million and up to $20 million
- 7.5% on amounts over $20 million
Example calculation for Municipal LTT of $700,000 property in Toronto
- As calculated in our first example, the provincial tax is $10,475
- The municipal tax is calculated the same, which is equal to $10,475, as the municipal tax bracket for property under $3 million is the same as in Ontario.
So, the total LTT for a property worth $700,000 in Toronto is $20,950.
Montreal
Montreal Land Transfer Tax has the following rates:
- 0.5% on the first $51,700
- 1.0% on the amount over 51,700 to $258,600
- 1.5% on the amount over 258,600 to $517,100
- 2.0% on the amount exceeding $517,100 to $1,034,200
- 3.5% on amounts over $2 million
FAQs about Land Transfer Tax In Canada
Who Pays Land Transfer Tax?
The buyer pays land transfer tax to the provincial government upon closing the real estate transaction. It must be paid in full as a one-time lump sum payment. The amount is typically included in the closing costs.
When is the Land Transfer Tax Due?
Land transfer tax is due immediately when the property transaction closes, and the buyer takes possession of the home or land. The buyer cannot delay paying the tax over time.
Can Land Transfer Tax Be Avoided?
There are 3 exemptions where buyers can avoid paying land transfer tax: - Purchasing a newly constructed home - Transferring a property between direct family members - First-time homebuyer rebates in some provinces However, the exemptions are limited. For most homebuyers, land transfer tax cannot be avoided.
Can I deduct land transfer tax from my income taxes?
No, land transfer tax is not tax deductible and cannot be claimed as a credit on your income tax return.
Can non-residents claim land transfer tax refunds in Canada?
Generally no, first-time homebuyer rebates are limited to Canadian citizens or permanent residents purchasing their first home.
Land Transfer Tax Rebate for First-time Home Buyers
There are 4 provinces in Canada that offer full or partial land transfer tax rebates for first-time home buyers:
- First-time buyers in Ontario can receive a rebate of up to $4,000 when buying their first home.
- BC first-time home buyers can get full LTT exemption on homes up to 500,000, partial rebates up to 500,000, partial rebates up to 500,000, and partial rebates up to 525,000.
- First-time buyers in PEI don’t pay LTT on homes under $200,000 when used as a primary residence.
- First-time homebuyers in Toronto can receive a rebate of up to $4,475 on the Municipal tax.
Eligibility for the rebates varies but generally includes:
- Being a Canadian citizen or permanent resident
- Never having owned property before
- Purchasing a home under a threshold value
- Occupying the home as a primary residence
The Bottom Line
Understanding Canadian land transfer taxes and rates is key when budgeting for a home purchase. While the tax can’t be avoided in most cases, first-time homebuyer rebates provide relief for qualifying buyers. This guide summarizes the key details and calculations needed to estimate your obligation when buying property across Canada. Consult with legal and financial professionals for advice tailored to your situation.
