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Land Transfer Tax – First time buyers: Pay up!

The following article is written by Ara Mamourian, the Broker of Record/Owner of They are a Boutique Brokerage in Toronto with a passion for Technology and Social Media.

Land Transfer Tax, argh! The Toronto real estate market has finally decided to cool down (in some segments anyway) taking a bit of pressure off of buyers during their house hunt. Of course there are exceptions to every rule and some homes are still selling at record prices. To be honest, we’ve been getting a bit tired of the demands put on buyers by unscrupulous sellers and their agents, but that’s a topic for another post (coming soon). Today I’d like to clear up a massive misconception regarding Land transfer tax and the rebates available to first-time home buyers.

Many people think that if you’re a first-time home buyer you pay no land transfer tax but unfortunately this just not true. In Ontario and Toronto, the land transfer tax rebate provides up to $2,000 and $3,725 respectively for a total maximum rebate of $5,750. That’s it, period. This means if your land transfer tax is greater than $2,000 in Ontario or $3,725 in Toronto, you’re on the hook for the net balance. To translate this in terms of house prices, you can only avoid land transfer tax altogether if your house is less than $227,500. Good luck finding that in Toronto!

Source: All number have been calculated using’s Land Transfer Tax calculator, check it out!

The average price of a condo in Toronto is at $364,597 and the average price of a house in Toronto at $682,864 (Detached $803,671, Semi $562,057) A First time buyer will be charged $1,944 for the condo and $13,790 for the house (add $5371 for the condo and $5725 for the house if you’re not a 1st time buyer). This is cash you cannot include in your mortgage amount. You need to come up with this in cold hard cash, on closing. The only fee that can be added to your total mortgage amount is the CMHC mortgage insurance for buyers with less than 20% down.

Hopefully this clears things up a bit and you can continue your home search comfortably (using the Spring Realty Home Finder of course!). There are other fees but this is the one that catches most people, especially 1st time buyers by surprise. If your agent, friend, or relative tells you that you shouldn’t worry about the Land Transfer Tax as a first time buyer, have them call us, we’ll straighten them out! Please remember to join the Spring Realty Insider Club for instant access to new posts and exciting new info as it becomes available. Don’t forget to connect with us on Facebook and Twitter too!