Land Transfer Tax in Canada

A land transfer tax, sometimes referred to as a property transfer tax, is one of several closing costs that must be paid when buying property in Canada.

It’s important to understand how much land transfer tax might cost you — and how you’ll pay it — when you’re budgeting for a home purchase. .

» MORE: How much mortgage can I afford?

What is land transfer tax?

Land transfer tax may be collected by a province, municipality or both, depending on where you live. Every province has some version of a land transfer tax, although it may go by a different name. Quebec levies a “welcome tax,” for instance, while Alberta and Saskatchewan charge a “property registration fee.”

Land transfer tax varies by region, and some municipalities charge considerably higher transfer fees than others. However, if you are a first-time home buyer, you may be eligible to get some (or all) of your tax payment refunded.

How much is land transfer tax?

Land transfer tax varies from city to city. To find out how much land transfer tax is in the community you might buy in, check its local government’s webpage.

» TRY IT: Use our land transfer tax calculator to estimate how much you might have to pay.

Who pays land transfer tax?

In Canada, no matter the province or municipality, it’s the buyer that pays the land transfer tax, not the seller.

Land transfer tax is due as soon as the buyer takes possession of the property. Unlike property taxes, land transfer taxes must be paid in full as a one-time payment. They should be factored into the funds you set aside for closing costs.

Can you avoid land transfer taxes?

There are cases, like in Ontario, where first-time home buyers may be eligible for a partial or full refund of their land transfer taxes. Other situations where land transfer tax can be avoided include:

Each province and municipality has its own rules regarding land transfer tax exemptions, so seek specific details from your local government and consider speaking to an expert, such as an accountant or tax specialist.

How to calculate land transfer tax

Land transfer taxes are typically calculated as a percentage of the property’s estimated value, which often equates to its purchase price. In many places, the percentage you’ll pay is higher for more expensive homes — similar to income tax brackets that charge a higher tax rate in higher tiers of income.

Here’s an example using a house in Ontario that costs $500,000. After buying this house you would pay:

Your total land transfer tax would be $6,475. If you’re a first time home buyer in Ontario, you might be eligible for a land transfer tax rebate of up to $4,000, which would reduce your land transfer tax bill to $2,475.