After much debate for months and months, here is the new Toronto Land Transfer Tax that was just passed by Council on 22 October 2007 and takes effect on 1 February 2008.
Transactions entered into prior to the end of the year will be fully exempt whenever they close. For the first month of the year, the deals must close before February 1st 2008. After that, the full tax applies.
For all purchasers:
• one-half of one percent of the value of the consideration on sales up to and including $55,000;
• one per cent of the value of the consideration on sales exceeding $55,000 up to and including $400,000;
• two per cent of the value of the consideration of land containing one and/or two single family residences exceeding $400,000;
• one and a half per cent of the value of the consideration on commercial properties including multi-residential units exceeding $400,000 up to $40 million;
• one per cent of the value of the consideration which exceeds $40 million.
Where the net revenue after transaction fees would result in revenue to the City of less than $2.00, the purchase would be exempt from the Toronto Land Transfer Tax.Purchasers with a Purchase and Sale agreement on or before December 31st, 2007 will receive a full rebate of the Toronto Land Transfer tax regardless of the closing date.
Purchasers with a Purchase and Sale agreement signed after December 31, 2007 with a closing before February 1, 2008 will not be required to pay the Toronto Land Transfer tax.
Purchasers with a Purchase and Sale agreement signed after December 31, 2007 with a closing on or after February 1, 2008 will be required to pay the full Toronto Land Transfer tax.
For first time purchasers: a rebate of up to $3,725 will apply to first-time purchasers of both new and existing homes. This means a full rebate for first-time buyers of homes valued at $400,000 or less. For example, a first-time purchaser of a home valued at $600,000 would pay land transfer tax according to the scale shown above, and receive a rebate of $3,725. A first time home buyer of a home valued at $300,000 would get a full rebate on the land transfer tax.
These taxes are in addition to the Land Transfer Tax imposed by the Province of Ontario.
Brian Madigan LL.B., Realtor is an author and commentator on real estate matters, Coldwell Banker Innovators Realty
905-796-8888
