Determining the amount of Land Transfer Tax ("LTT")
payable on a routine purchase and sale transaction is not a
difficult task. On a more complicated transaction or series of
transactions, however, the impact of the Land Transfer Tax
Act R.S.O. 1990, c.L.6, as amended (the "Act") and
the resultant LTT may have surprising and unfavourable results for
a purchaser.
In the 1980s, unregistered conveyances of beneficial interests
and transactions involving bare trustees were increasingly used to
avoid the payment of LTT. As a result, in 1989 the Ontario
government chose to tax unregistered transfers of real property.
Consequently, the Act now has parallel systems of taxation: Section
2 of the Act imposes LTT on a registered 'conveyance', and
Section 3 imposes LTT on an unregistered disposition of a
beneficial interest in land. A registered conveyance is one that is
tendered for registration, either in the electronic Teranet Land
Titles system or paper Polaris Registry
