Ontario Increases Land Transfer Tax Rates

On November 14, 2016, as part of its fall fiscal update, the Government of Ontario announced a number of changes to the Land Transfer Tax ("LTT"). These changes are intended to modernize the LTT and to make housing more affordable for new home buyers. As discussed in greater detail below, the changes involve (i) increases in the LTT rates on transfers of certain categories of property, and (ii) an enhanced first-time homebuyer's refund for eligible first-time homebuyers.

Increasing LTT Rates

Likely the most significant of the new changes is an increase in the LTT rate on transfers of commercial, industrial, multi-residential and agricultural properties (collectively "Commercial Properties"). Under the new regime, the LTT rate on the portion of any consideration in excess of $400,000 will be subject to tax at a rate of 2%, up from the current 1.5%. This change will likely affect many, if not most, sales of Commercial Properties and will represent a