Property Transfer Tax
Property Transfer Tax is paid on the purchase or if their is an interest acquired in a given property. It is a land registration tax. The tax is due when the transaction is registered with the Land Title office and the changes to the certificate of title is filed. A change would include removing a name from the title, for example.
The amount of Property Transfer Tax due is based on the fair market value of the property being acquired. This is typically based on the purchase price of the property, but in cases where no money changes hands this is based on the annual assessments complete on the home or land as of July 1 the previous year.
First time home buyers are exempt from paying the Tax for an home under $425,000. If the home is over $425,000, they are eligible for an exemption up this this amount. Other individuals that may qualify for an exemption are as follows:
Other specific exemptions may apply to transfer of property involving family members, subdivision of a property, transfer to and from a trust company, leases less than 30 years, transfer for a minor or reservation/surrendered land.
The tax rate is 1% on property valued at $200,000 or less. For any value over $200,000, the tax rate is 2% of the incremental value. Examples are as follows:
Property Value = $175,000, Tax due is $1,750.
Property Value = $500,000, Tax due is $8,000. (1% of $200,000 plus 2% of $300,000)