On November 14, 2016, the Government of Ontario announced a land transfer tax ("LTT") rate increase.
Current LTT Rates
Land transfer tax is currently assessed on the "value of consideration" as follows:
- 0.5% of the value up to and including $55,000;
- 1.0% of the value which exceeds $55,000 up to and including $250,000; and
- 1.5% of the value which exceeds $250,000.
LTT Rate Increase
Effective January 1, 2017, the LTT rate will increase from 1.5% to 2.0% of the value of consideration above $400,000 for purchases of commercial, industrial and multi-residential properties.
As a transitional measure, purchasers who entered agreements of purchase and sale on or before November 14, 2016, will not be subject to this LTT rate increase, even if the closing occurs after January 1, 2017.
Purchasers who entered agreements of purchase and sale after November 14, 2016, should attempt to close their purchases before the end of the calendar year, in order to avoid this LTT rate increase.
The City of Toronto has not yet indicated whether it will increase its corresponding LTT rate, but it usually follows the Province in these matters.
Should you have any questions, please contact a member of our Real Estate Group.