Understanding land transfer taxesIf you're buying a home in a large Canadian centre, you'll need to add land transfer taxes to your list of closing costs.
Unless you live in Alberta, Saskatchewan, or rural Nova Scotia, land transfer taxes (or property purchase tax) are a part of the home buying process. These taxes, levied on properties that are changing hands, are the responsibility of the purchaser. Depending on where you live, taxes can range from 0.5% to 2% of the total value of the property.
Many provinces have multi-tiered taxation systems that can seem complicated. If you purchase a property for $260,000 in Ontario, for example, 0.5% is charged on the first $55,000, 1% is charged on $55,000 to $250,000, while the $250,000 - $400,000 range is taxed at 1.5%. Your total tax bill? $2,375.00.
Ontario land transfer taxes
Up to $55,000 X 0.5% of total property value
From $55,000 to $250,000 X 1% of total property value
From $250,000 to $400,000 X 1.5% of total property value
From $400,000 up X 2% of total property value
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