TIMMINS REAL ESTATE - LAND TRANSFER TAX

Few, if any, portions of Canadian life are immune from taxation. Real estate transactions are no exception. More often than not, I’m forced to explain to real estate clients that additional funds are required to satisfy Land Transfer Tax. These are not “legal fees” per se, but rather a provincial tax. The amount of the tax varies in accordance with purchase price. The levy is NOT limited to purchases, but may also be collectable on other forms of dispositions, such as options to purchases and leases.

How much is it? The current rates are ½ of 1 percent on the first $55,000, 1 percent on the portion above $55,000 and including $250,000, and 1 ½ percent on the balance owing. A rate of 2 percent will be applied to portions in excess of $400,000. Many websites contain easy-to-use calculators that are accessible via Google. In the alternative, you can use the following formulas to calculate the taxes on residential purchases:

·                     < $250,000 = Consideration x 0.01 minus $275

·                     < $400,000 = Consideration x 0.015 -$1,525

·                     > $400,000 = Consideration x 0.02 - $3,525

There are a number of exemptions to the amount of taxes payable. For example, transfers between spouses are generally non-taxable. Further, first time home purchasers may be entitled to a refund. The refund is limited to $2,000 and first time purchasers must pay any and all amounts in excess of that amount. To be eligible for the first time homebuyer(s) refund, you and/or your spouse (if any) must have never owned a home anywhere in the world. For details regarding Land Transfer Tax, please contact our office, 24 hours a day, 7 days a week.

-          Benjamin Dawkins is a real estate lawyer with the Timmins firm Evans, Bragagnolo & Sullivan www.ebslawyers.com. You can contact Benjamin at bdawkins@ebslawyers.com.