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Every conveyance of land tendered for registration in Ontario, as well as every unregistered disposition of a beneficial interest in land are subject to land transfer tax ("LTT"), unless specifically exempt under the Land Transfer Tax Act, R.S.O. 1990, c. L.6 (the "Act") or a regulation under the Act. This QuickCounsel provides a high level overview of land transfer tax in Ontario for companies that own or are considering buying real estate in Ontario.

Calculating Land Transfer Tax


Value of Consideration
LTT is payable based on the "value of consideration" applicable to a transaction. Ontario's Ministry of Finance (the "Ministry") has issued many bulletins that clarify how the Ministry interprets the Act. With respect to "value of consideration", Bulletin LTT 2-2005 states:

"Land transfer tax is calculated on the "value of the consideration" as defined in subsection 1(1) of the Act. It includes the purchase price, liabilities assumed, benefits conferred, soft costs and the cost of upgrades. In some instances, the value of the consideration is deemed to be the fair market value of the land, for example, leases over fifty years and transfers between corporations and shareholders."

The Formula
The amount of LTT payable increases as the value of consideration increases. It is calculated using the following formula:

Amounts up to and including $55,000: 0.5 %

Amounts exceeding $55,000 up to and including $250,000: 1.0 %

Amounts exceeding $250,000: 1.5 %

Amounts exceeding $400,000: 2.0%

(only applies where land contains one or two single family residences)
An online LTT calculator for residential and commercial properties can be found at: Please note that the calculator found at the foregoing link does not calculate the additional land transfer tax payable in the City of Toronto. This extra layer of land transfer tax is discussed below.
Further information about calculating land transfer tax can be found in Bulletin LTT 2-2005 located on the Ministry's website at:
A copy of the Act and associated regulations can be sourced at:

Useful bulletins issued by the Ministry can be found at:

Toronto's Extra Layer of Land Transfer Tax

The City of Toronto levies its own form of land transfer tax, called the municipal land transfer tax ("MLTT"). MLTT is calculated using a slightly different formula. MLTT is payable in addition to LTT, almost doubling the tax payable on registered conveyances and unregistered dispositions within the City of Toronto. By way of example, if you were to purchase a commercial property in Ontario located outside of Toronto for $5,000,000 (CAD), LTT will be payable in the amount of $73,475 (CAD). If the commercial property is located in Toronto an additional $72,725 (CAD) would be payable for total LTT and MLTT of $146,200 (CAD).
For further information about Toronto's land transfer tax, please refer to the City of Toronto's website at:

The author was not able to locate a reliable online MLTT calculator for commercial properties located in the City of Toronto. However, if you are considering purchasing a commercial property in the City of Toronto, an Ontario lawyer can quickly confirm the amount of MLTT payable in such a scenario by logging into Ontario's online land registration system.

Collection and Payment of Land Transfer Tax

LTT is paid by the buyer of land or transferee of a beneficial interest in land. In the case of registered conveyances, LTT is collected by the lawyer acting for the purchaser before closing and is withdrawn from the buyer's lawyer's trust account upon registration of the Transfer/Deed of Land.

In the case of unregistered dispositions, LTT is payable on the 30th day following the date of disposition and must be paid directly to the Ministry.

Transfers Involving Corporations

Some transfers of land involving corporations are exempt from LTT, while others may qualify for a deferral and cancellation of LTT.
Two common exemptions from the requirement to pay LTT arise in the context of statutory amalgamations and corporate re-organizations. With respect to statutory amalgamations, the Ministry does not consider the situation whereby land owned by two or more companies that becomes vested in the company resulting from the amalgamation to be a "conveyance" or "disposition" with the meaning of the Act. Documentation does not need to be submitted to the Ministry after an amalgamation of two or more companies that own land.
A corporate re-organization that results in an unregistered disposition of land can be exempt from LTT provided certain conditions are met, including the requirement that the disposition occur as part of a re-organization in the course of which a dividend is received by a corporation. Documentation must be submitted to the Ministry including a prescribed return, an application for the exemption, copies of all agreements between the parties as well as a brief outline of the series of transactions to confirm that the requirements of the exemption have been met.
A common opportunity to defer and cancel LTT arises in the case of unregistered dispositions of land between affiliated corporations.
Certain conditions must be met:

1. before the 30th day after the date of disposition of the beneficial interest in the land, the corporation must apply to the Minister for the deferral and undertake that for a period of at least three years immediately following the date of the disposition,

a) the corporation making the disposition and the corporation acquiring the beneficial interest in the land on the disposition will continue to be affiliates of each other, and

b) the beneficial interest in the land will continue to be owned by the corporation acquiring the beneficial interest in the land on the disposition or by a corporation that is an affiliate of that corporation and with the corporation which made the disposition of the beneficial interest in the land;

2. security for the tax in a form and of a kind acceptable to the Minister is furnished to the Ministry. A letter of credit in a form approved by the Ministry is acceptable security; and

3. no conveyance or instrument or electronic document evidencing the disposition is registered.

Cancelling Deferred LTT
Deferred LTT will be cancelled if one of the following conditions is met:

1. the Ministry is of the opinion that the undertaking referenced in 1(a) and (b) above has been satisfied and no conveyance or instrument evidencing the disposition of the beneficial interest in land has been registered;

2. a conveyance or instrument or electronic document evidencing the disposition of the beneficial interest in land to the corporation has been registered and LTT has been paid; or
3. there has been a disposition of the beneficial interest in the land, or a conveyance of the land, by the corporation, or by an affiliate of the corporation, to a person who is not an affiliate of the corporation and LTT has been paid in respect of that disposition or on registration of the conveyance, as applicable.
For more information about LTT as it applies to transfers among corporations and to view the form of letter of credit approved by the Ministry, please refer to Bulletin LTT 3-2000 found at:

For detailed information about the treatment of different types of unregistered dispositions of a beneficial interest in land, please refer to a detailed guide issued by the Ministry, which can be found at:

Interest, Penalties and Offences

Every person liable to pay tax in connection with an unregistered disposition of a beneficial interest in land must deliver a return to the Minister and remit the tax payable with the return. If a return is not delivered as required or the tax is not remitted with the return, the Act authorizes the Ministry to assess a penalty in an amount equal to 5% of the amount of tax payable.
The Act also authorizes the Minister to impose a penalty in an amount equal to the greater of CAD $500.00 and 25% of the tax a person has failed to pay where that person's failure to pay tax is attributable to fraud or willful default. All penalties imposed are in addition to any tax payable.

In addition to the administrative penalties discussed above, the Act provides that a person who fails to deliver a return as required or fails to remit the tax payable is, on conviction, liable to a fine of not less than 25% of the tax payable and not more than double the amount of the tax payable. In the case of false and deceptive statements made in a return, a person will be liable on conviction to a fine of not less than $1,000.00 (CAD) and not more than double the amount of the tax which is properly payable. On conviction, a person is liable to imprisonment for a term of not more than two years. The imposition of a penalty, fine, or both does not alleviate liability for tax.


LTT can represent the most significant closing cost in a real estate transaction, especially if the property is being purchased within the City of Toronto. It is important to consider the amount of LTT that will be payable before entering into an agreement of purchase and sale. Potential exemptions from LTT and opportunities to defer LTT should be considered when structuring transactions that will result in unregistered dispositions of a beneficial interest in land.

Other Resources

Region: Canada
The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.