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MLTT Frequently Asked Questions |
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| 1. What is the Municipal Land Transfer Tax (MLTT)? |
On October 22, 2007, Toronto City Council approved the Municipal Land Transfer Tax (MLTT) as
a new taxation measure pursuant to the statutory authority granted under the City of Toronto Act, 2006.
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| 2. When will the City start charging the MLTT? |
The MLTT will be charged on the registration of all conveyances of land in Toronto commencing on February 1, 2008
and on the disposition of all beneficial interests in land commencing February 1, 2008.
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| 3. How much is the tax? |
The MLTT will be charged on a graduated basis depending on the consideration value of the property. MLTT Rates
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| 4. Who is collecting the MLTT on behalf of the City? |
The City of Toronto designated Teranet as the official MLTT collection agent.
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| 5. How do I pay the MLTT? |
When your property transaction is registered by your lawyer, the MLTT will be calculated and paid.
The amount of the MLTT will be included as part of your real estate closing costs. Your lawyer should be able to advise you on this matter.
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| 6. Is there a minimum tax amount? |
When the total MLTT payable is less than $72 no MLTT will be charged.
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| 7. Is the City offering any rebate programs for the MLTT? |
Yes. The City of Toronto will offer MLTT rebates for grandfathering and for first-time home purchasers.
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| 8. If I register at the Land Registry Office or Ministry of Revenue (Oshawa) of if the registration is being done at a Land Registry Office or if I'm paying my provincial land transfer tax in advance, how is the MLTT paid? |
Payment should be made directly to the City. The City plans to make information about how to calculate and make the payment available at the Ministry of Revenue (Oshawa) and Toronto Land Registry Office locations, and through the City's website. You may also call a City of Toronto customer service representative at 416-338-4829.
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| 9. How is the tax charged when there are multiple purchasers and one or more, but not all, are first-time purchasers? |
In these cases, the City of Toronto adopted the provincial land transfer tax policy.
Questions about multiple purchasers can be answered by consulting the Provincial guidelines.
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| 10. I'm buying a business. Does this tax still apply? If so, am I entitled to the rebate if I never owned a property before? |
The MLTT applies to all properties. The first-time home purchaser rebate applies to residential property only. It does not apply to commercial, industrial or multi-residential properties.
However, there is more than one type of rebate. The grandfathering rebate may apply if the date of the Agreement of Purchase & Sale is on or before December 31, 2007.
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| 11. What kind of records do I need to keep in the file? |
The City will be performing audits of rebate applications on a random basis and, if selected, purchasers will be required to provide, without limitation, the following:
- A copy of the MLTT Rebate Affidavit
- A copy of the MLTT Rebate Application
- The Agreement of Purchase & Sale and any assignments or amendments thereof
- The cancelled deposit cheque or other evidence of payment of the deposit
- The closing statement of adjustment and any other documents confirming entitlement to the rebate being claimed
Failure to comply with this requirement will result in penalty.
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| 12. How long must I keep the records? |
You must keep your records for a period of seven years.
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| 13. Are there any statutory exemptions to the MLTT? |
Yes, under the City of Toronto Act, 2006, the following statutory exemptions will apply:
- Crown and crown agencies
- Authorities, boards, commissions, offices and organizations of persons a majority of whose directors, members or officers are appointed or chosen by or under the authority of the lieutenant governor in council or a member of the Provincial Executive Committee
- School Boards
- Universities and colleges of applied arts and technology and post secondary institutions
- Hospitals
- Nursing homes, homes for the aged and rest homes
- Other persons and entities as may be required by the Province/City
Other exemptions include:
- All property purchases made by the City of Toronto and its local boards
- the Toronto Community Housing Corporation
- the Toronto Economic Development Corporation
- All conveyances exempt from the Provincial Land Transfer Tax
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Rebates
| 14. What is a grandfathering rebate? |
If the Agreement of Purchase & Sale was entered into, on or before December 31, 2007, the purchaser is eligible for a full rebate.
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| 15. What is a first-time home purchaser rebate? |
A rebate to a maximum of $3,725.00, will apply to first-time purchasers of both new and existing residential properties.
This means that first-time purchasers of residential properties with a consideration value of $400,000.00 or less will receive a maximum rebate of $3,725.00.
A first-time purchaser of a residential property with a consideration value of $600,000.00 would pay a land transfer tax of $7,725.00 (see MLTT Rates) and receive a rebate of $3,725.00.
A first-time purchaser of a residential property with a consideration value of $300,000.00 would receive a rebate of $2,725.00.
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| 16. Who is considered a first-time purchaser? |
The definition of a first-time purchaser is:
- The purchaser is at least 18 years of age.
- The purchaser must occupy the home as his/her principal residence no later than nine months after the date of the conveyance or disposition.
- The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
- If the purchaser has a spouse, the spouse cannot have owned a home, nor had any ownership interest in a home, anywhere in the world while he/she was the purchaser's spouse. If this not the case, no refund is available to either spouse.
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| 17. How does spousal ownership and inheritance affect eligibility for the first-time purchaser rebate? |
In these cases, the City of Toronto adopted the Provincial land transfer tax policy. Questions about the inheritance guidelines can be answered by consulting the
Provincial guidelines.
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| 18. My Agreement of Purchase & Sale and closing date are both dated before February 1, 2008. Do I have to pay the MLTT? |
No. The MLTT comes into effect for properties with closing dates on or after February 1, 2008.
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| 19. My Agreement of Purchase & Sale was entered on or before December 31, 2007 and my closing date is on or after February 1, 2008. Do I have to pay the MLTT? |
You are eligible for a full rebate under the grandfathering provision. The MLTT does not have to be paid, provided you submit all required documentation.
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| 20. My Agreement of Purchase & Sale was entered after December 31, 2007 and my closing date is after February 1, 2008. Do I have to pay the MLTT? |
Yes. The MLTT comes into effect for properties with closing dates on or after February 1, 2008. However, you may qualify for a first-time home purchaser rebate.
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| 21. I qualify for a MLTT rebate. How do I apply? |
Your real estate lawyer will complete the application for you.
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| 22. Is there a time limit on when the request for rebate must be submitted? |
Yes. The application for a rebate must be made within 18 months after the date of which the conveyance or disposition occurred.
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| 23. Can I apply for the rebate or does my lawyer have to do it? |
If you are eligible, please ensure that your real estate lawyer applies for the rebate on your behalf.
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| 24. How will I know that the rebate request has been received by Teranet? |
The successful fax transmission sheet or email receipt of the affidavit is your confirmation.
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| 25. When will I receive my rebate? |
If you are eligible for a rebate of the entire amount of MLTT you owe, you will receive an automatic rebate when your lawyer registers your property transaction and will not have to pay the tax.
If you are eligible for a rebate for a only a portion of the MLTT, the full tax will be collected at the time your lawyer registers your property transaction and a rebate cheque will be mailed to you shortly thereafter.
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