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New Land Transfer Tax Explained
Posted on November 9, 2007 at 1:15 pm
Filed Under Canadian Taxes, Mortgage Planning, Real Estate
The new land transfer tax is an extremely hot topic for residents of Toronto, and for good reason too.
This new tax can and most likely will have a significant impact on cash flow, down payments, and even things as simple as furnishings for those Toronto residents who purchase their home after January 1st, 2008. It is interesting to note that Toronto is the only city with two home buying taxes, we have the highest land transfer taxes in Canada, and the second highest in North America. That shouldn’t sit well with many Toronto residents at all.
Your Take-Away: To some readers, this new tax is verging on offensive, but it can be hard to know how much of a real impact it will have on Torontonians. To put it in perspective, an average two storey home sells for approximately (approximate being the key word here) $400,000 in Toronto. Just for being a Canadian, your existing land transfer tax will cost you $5,475 and with the new Toronto land transfer tax, your total bill jumps to a whopping $10,200. That means this new Toronto tax alone has a $4,725 price tag. Pretty hefty.
One thing to be aware of is that this new tax does have a grandfather clause which means that if you were to buy a new home prior to December 31st, 2007 you will be exempt from this new tax regardless of the closing date.
If you are looking to buy today, it may make sense to buy before New Year’s Eve…it could save you thousands of dollars!
Until next time, have a Fantastic Weekend
Chris and Elisseos
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