Land Transfer Tax
Land transfer tax (LTT) is often overlooked when considering the total cost of purchasing a home. All provinces have a land transfer tax, except Alberta and Saskatchewan, who instead levy a much smaller transfer fee. To see how land transfer tax is calculated on a home purchased in Ontario, watch the video below.
How to Calculate Ontario Land Transfer Tax?
Homebuyers interested in buying a land in Ontario are required to pay a land transfer tax. The land may include buildings to be built, buildings and fixtures (like built-in appliances, light fixtures and cabinetry). Acquiring a land or property and paying their land transfer tax are based on a certain amount. And this amount is added to the amount left on the debt or mortgage and the arrangement of buying a land.
In other cases, the land transfer tax relies on the market value of the land. For the first-time buyers, it is good to know that they are eligible in getting a complete refund. This is another part of the land transfer tax.
On the other hand, there are land taxes that need to be paid on the local municipalities prior to the business or residential properties. If you have some questions on the municipal property taxes, it is best to contact them. If the property is situated in an unorganized territory of Ontario, the property tax is to be collected as part of the land tax program. This is the program administered by the land tax office.
As per the rates on the land transfer, they are calculated based on their values such as 0.5% and including the amount of $55,000 dollars; 1% up to $55,000 up to $250,000; 1.5 % to $250,000; and 2% up to $400,000 wherein the property contains two or single family residences. The tax rates on the land transfer are always the same for both the residents and non-residents of Canada.
On the other hand, homebuyers tend to forget the entire cost of buying a home. As updated in the year of 2013, the land transfer tax rates for the home that costs $55,000 is 0.5%. On the purchase of home that costs $55,000 dollars to $250,000 dollars; the land transfer tax rate will be 1.0%. On the purchase of a home that costs %250,001 dollars to $400,000 dollars, the land transfer tax rate will be 1.5%. On the other hand, the house that costs $400,000 dollars will have a land transfer tax rate of 2.0%. As per the rebate, this is made available among first time home buyers and covers the land transfer for $2,000.
If you will purchase a home based in Toronto, it matters paying attention to the Toronto Land Transfer Tax. Apart from the land transfer tax, you need to pay for the closing costs in the area of Ontario. The closing costs include fees for both the real estate lawyer and home inspector in Ontario.
In showing you an example of calculating a land transfer tax, you may be interested in purchasing a home that costs $320,000 dollars. The first marginal bracket is $55,000 dollars to be multiplied by 0.50%. Thus, the land transfer tax will be $275 dollars. For the upper marginal tax bracket of $250,000, it is to be subtracted to $55,000 and multiplied by 1.00% (marginal tax rate) which is equal to $1,950 dollars. For the property value of $320,000 dollars, it is to be subtracted to $250,000 as the lower marginal tax bracket. The land transfer tax will be $1050. The sum total of land transfer taxes is calculated by adding $275 dollars, $1,950 dollars and $1050 dollars which are equal to $3275 dollars. This is now the complete land transfer tax.
Resourceful Capital Financial Corporation is offering a collaborative, innovative and friendly work in calculating your land transfer tax in Ontario. Through their talented team, they are passionate in supporting every individual in fulfilling their dreams of owning a house or property in Ontario! Feel free to call them at this number 1-888-882-0786!
How to Calculate the Land Transfer Tax in Quebec?
Land transfer tax is being overlooked by most home or property buyers. This is especially true when considering the entire cost of buying a home. All of the provinces in the United States have their land transfer taxes. However, Saskatchewan and Alberta are not included as they levied small transfer fees.
In seeing how land transfer tax rates are calculated in Quebec, it is first important to understand that the land transfer tax is different from Montreal. The tax being collected and calculated are based on the municipal level. The basing amount or the value of the property being used as part of the calculating is being determined. This is determined by means of the purchase price, the amount being listed as part of the “deed of sale” and the property’s market value. The latter is being determined by the municipal assessment and is increased by the comparative factor.
After the basing amount is already determined, then the land transfer tax will be governed by the scale. The value of the property starts from $50,000 dollars that has a marginal tax rate of 0.5%; $200,000 dollars with a marginal tax rate of 1.0%; over $250,000 with a marginal tax rate of 1.5%; and over $500,000 with 2.0%.
In the assessment of the land transfer tax rates in Quebec, the comparative factor used in 2012 is 1.08; 2011 is 1.00; 2010 is 1.19; 2009 is 1.11; and 2008 is 1.06. You also have to view the 2013 rates in Quebec in calculating the land transfer tax fast.
Always remember that the land transfer tax to be paid in Quebec is the percentage of the purchasing price of your home. The marginal tax rate ranges from 0.5 % up to 1.5%. Every portion of the value of the home is being taxed at a different marginal tax rate. The extra tax bracket in Montreal ranges from $250,000 dollars to $500,000 dollars. The tax rate is at 1.5%.
An example of a land transfer tax calculation is a home that costs $620,000 in Montreal. The first marginal tax bracket is at $50,000 to be multiplied by 0.5% is equals to $250 land transfer tax. The lower marginal tax bracket of $50,000 is to be subtracted from $250,000. Then, it is multiplied to 1.00% as the marginal tax rate. Then, it is equal to $91 land transfer tax.
Next, the property value of $620,000 is to be subtracted to $250,000 as the lower marginal tax bracket. Then, the result is to be multiplied by 1.5% as the marginal tax rate. The result will be $5,550 dollars as the land transfer tax. The next calculation will be $150 land transfer tax added to $2000 land transfer tax and $5,550 land transfer tax. This is equal to $7,700 dollars as the total land transfer tax.
Now, you can determine the right land transfer tax to be paid by relying on Resourceful Capital Financial Corporation. Feel free to call them at this number 1-888-882-0786!
How to Calculate Land Transfer Tax in British Columbia?
When buying a condo, land or house in British Columbia, it is crucial to know that you need to pay for a land transfer tax. This is a must obligation among the many buyers. You are also allowed to pay the 2013 rates through a simple calculation.
As updated in the year of 2014, the land transfer tax rates are considered as the marginal taxes. Every portion of the value of the home is being taxed at its different tax rate. There are different land transfer tax rates such as the purchase price of $200,000 with a 1.0% marginal rate; above $200,000 with 2.05 marginal rates. The good news is that first-time home buyers are being offered with complete tax rebates or half tax rebate. And this depends on the overall value of the property or home.
For instance, you will purchase a home that is worth $280,000 dollars. The first marginal bracket of $200,000 is multiplied by 1% marginal tax rate. This is equal to $2,000 land transfer tax.
The property value of $280,000 is to be subtracted to $200,000 as the lower marginal tax bracket. Then, it is multiplied to 2% as the marginal tax rate. The result will be $1,600. $2,000 land transfer tax plus $1600 land transfer tax is equals to $3600. The land transfer tax to be paid is equals to $1600. This is just how easy it is to calculate the land transfer tax rates.
British Columbia is providing land transfer tax rebates among first-time homebuyers. The homes purchased for the amount of $475,000 are allowed to receive a complete refund. The homes that are purchased between $475,001 and $449,999 will receive a half refund.
The first-time homebuyers are allowed for eligibility in the British Columbia. The first time-home buyers are qualified if they are a permanent resident in Canada or a Canadian citizen. They should also live in British Columbia for the twelve consecutive months before their property is being registered. They must have filed two income taxes for the previous years. They also allow for rebates when they do not own their home in other countries. They must also not receive an exception or refund before.
Apart from it, the property is qualified for a complete refund if the property’s market value does not exceed $475,000. The land should also be 0.5 hectares or is smaller. And the property or home should be used as a main residence for the family.
On the other hand, you are eligible for the complete refund if the property is at a range of $475,001 up to $499,999. Apart from it, the land should be greater than the 0.5 hectares. A piece of your land should be utilized for commercial goals and as for the main residence.
Now, you can determine the right land transfer tax to be paid in British Columbia by relying on Resourceful Capital Financial Corporation. Feel free to call them at this number 1-888-882-0786!