Transferring a property title to a corporation can be a smart financial move for many reasons. It can help protect your personal assets, provide tax benefits, and allow for easier transfer of ownership in the future. However, if you’re considering transferring your property title to a corporation, you may be wondering if you’ll have to pay land transfer tax. Here’s what you need to know.
What is Land Transfer Tax?
Land transfer tax is a tax that is payable when a property is transferred from one owner to another. In Ontario, land transfer tax is calculated based on the purchase price of the property and is paid by the purchaser at the time of the transfer.
Do I Have to Pay Land Transfer Tax If I Transfer My Property Title to a Corporation?
Yes, you will have to pay land transfer tax if you transfer your property title to a corporation. The Ontario government considers this to be a change in ownership, and therefore, land transfer tax is applicable.
How Much Land Transfer Tax Will I Have to Pay?
The amount of land transfer tax you’ll have to pay will depend on the value of the property being transferred. In Ontario, the land transfer tax rates are as follows:
- 0.5% on the first $55,000 of the purchase price
- 1.0% on the portion of the purchase price above $55,000 up to and including $250,000
- 1.5% on the portion of the purchase price above $250,000 up to and including $400,000
- 2.0% on the portion of the purchase price above $400,000 up to and including $2,000,000
- 2.5% on the portion of the purchase price above $2,000,000
In addition to the provincial land transfer tax, there is also a municipal land transfer tax in some cities, such as Toronto. The municipal land transfer tax rates vary by municipality.
Are There Any Exemptions or Rebates Available?
There are some exemptions and rebates available for land transfer tax in certain circumstances. For example, if the transfer of ownership is between spouses or common-law partners, or if the transfer is to a qualifying charitable organization, the land transfer tax may be exempt. Additionally, first-time homebuyers may be eligible for a rebate of up to $4,000.
Working with an Ontario Real Estate Lawyer
Transferring your property title to a corporation can have many financial benefits, but it’s important to consider all of the legal and financial implications before making this decision. Working with an experienced Ontario real estate lawyer like Falcon Law PC can help ensure that the transfer is done properly and that all applicable taxes are paid.
Contact Falcon Law PC at 1-877-892-7778 or info@falconlawyers.ca for a consultation. We can help guide you through the legal process and ensure that your transfer of property ownership is a success.
