Last fall, the City of Toronto put into place its own land transfer tax, referred to as the Municipal Land Transfer Tax (MLLT). This tax is similar to the Ontario Land Transfer Tax and is an additional tax that must be paid by those purchasing land within Toronto, at the time a conveyance is registered.
What follows is a brief explanation of how the MLLT works.
When will the MLLT be implemented?
The MLLT will be charged on homes purchased in the City of Toronto, with closing dates on or after February 1, 2008. It should be noted that this tax applies only to properties within the City of Toronto.
What are the MLLT rates?
The following rates apply to property containing at least one, and not more than two, single family residences
o 0.5% of the value of consideration for the transfer up to and including $55,000.
o 1% of the value of the consideration which exceeds $55,000 up to and including $400,000.
o 2% of the amount by which the value of the consideration exceeds $400,000.
The following rates will apply to all other properties.
o 0.5% of the value of consideration for the transfer up to and including $55,000.
o 1% of the value of the consideration which exceeds $55,000 up to and including $400,000.
o 1.5% of the value of the consideration which exceeds $400,000 up to and including $40,000,000.
o 1% of the amount by which the value of the consideration exceeds $40,000,000.
What rebates are available?
Purchasers, who signed their agreement of purchase and sale on or before December 31, 2007, will be entitled to a full rebate of the MLLT, even if the closing date is on or after February 1, 2008.
First-time homebuyers are eligible for a rebate of the MLLT up to a maximum of $3,725. The rebate applies to newly-constructed homes and resales with two or less single-family residences.
The rules with respect to who is considered a first-time homebuyer are the same as the Ontario Land Transfer Tax rules. (See page 1.)
How is the rebate claimed?
If the purchaser is eligible for a full rebate of the MLLT, it will automatically be granted at the time of the registration of the conveyance.
If the purchaser is eligible for a partial rebate only (i.e. the home is worth more than $400,000) the full tax will be collected at the time of registration. The purchaser must then submit a rebate application and affidavit, which the lawyer can supply. Once these have been received by the government, the rebate will be paid to the purchaser.
Where can I get more information?
For additional information about the Municipal Land Transfer Tax please contact Stan Landau or Howard Steinberg.
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