Ontario Modernizing Land Transfer Tax

On November 14, 2016, the Ontario Minister of Finance, Charles Sousa, presented the 2016 Ontario Economic Outlook and Fiscal Review in the Ontario Legislature. Among the various proposals in the Outlook, the Minister proposes to "modernize" Land Transfer Tax. The modernization includes: doubling the maximum refund for first time home buyers; increasing the rate payable on residential properties; and increasing the rate payable on non-residential properties. Land transfer tax rates are currently:

• 0.5% on the first $55,000;
• 1% above $55,000 to $250,000;
• 1.5% above $250,000; and
• 2% above $400,000 if the land contains one or two single-family residences.

For residential properties, the proposed changes would add a new rate of 2.5% on that component of the purchase price in excess of $2 million. For non-residential properties, there would be a new rate of 2% on that component of the purchase price over $400,000.