Are you planning to purchase a new home? You may be charged an Ontario land transfer tax when you accept the deeds to property ownership from another person. The amount varies, but it's typically quite large.
The tax is calculated based on the purchase price of your home and can add up to thousands of dollars. But don't worry, there are ways to avoid paying the LTT. If you’re wondering are there ways to avoid land transfer tax in Ontario, the answer is yes! Here are some tips:
Learn some tips to avoid paying the expensive land transfer tax in Ontario when you buy a home!Click To TweetThe best way to avoid the Ontario land transfer tax is through inherited land from a direct ancestor

When it comes to buying property in Ontario, the Ontario land transfer tax can quickly add a hefty additional cost. For many prospective homebuyers, this extra financial burden can be difficult to shoulder.
Thankfully, there is one tried and true way to avoid paying this tax – by inheriting the land. Ontario's land transfer tax regulations have an exemption provision for lands inherited from direct ancestors such as parents, grandparents, siblings or uncles and aunts.
As long as proof of relation can be provided, you will not have to pay any Ontario land transfer taxes.
You can avoid paying the LTT by purchasing a newly built home
Ontario’s LTT only applies when you buy an existing property; newly built homes are exempt from the tax. This means that if you choose to buy a newly constructed home, you can cut down on one of your major expenses and save money.
Of course, there are other associated costs with purchasing a new home, but the savings from avoiding the LTT can be considerable.
Ultimately, deciding whether to purchase an existing property or a newly developed one will depend on your budget and personal preferences. But for those looking to save money in Ontario’s real estate market, buying a newly built home may be worth considering.
Buy your home abroad to avoid the property transfer tax
Purchasing a property abroad can be an exciting and cost-effective way to secure a new home. Not only is the overseas market often less competitive, but it can also help you to avoid hefty Ontario land transfer taxes. These taxes are calculated on a sliding scale, with rates up to 15 percent in Ontario. So buying overseas might be cheaper than buying in Canada overall.
Furthermore, different countries have different tax regimes for homeowners, with some offering reduced or no taxes.
Spouses are exempt from Ontario's LTT
LTT is not applicable when a person inherits a property from their spouse. In this case, the ownership of the property will pass to the surviving spouse without any further tax obligations. This is true even if the estate has been probated. Meaning that the surviving spouse can move ahead with their plans and get settled into the new home without any extra financial burdens.
HOW MUCH DOES LAND TRANSFER TAX COST?
This can be thousands of dollars. It is hard to say how much the exact sum would be as this depends on various factors. However, there are several special calculators that you can use that will help you out.
Just remember that some users even go so far as to apply for home equity financing to pay for the tax.
FINAL THOUGHTS
As noted, there are situations in which you can avoid paying the Ontario Land Transfer Tax. However, even if you do have to pay it, the tax is based on a sliding scale, so depending on the value of your home, it may not be as costly as you initially feared.
If you're still not sure whether or not you'll have to pay and need more information, consult an experienced real estate lawyer who can offer guidance specific to your situation.
Leave a Reply