Ontario Land Transfer Tax

Any time you buy land, or an interest in a piece of land, in Ontario, you have to pay a land transfer tax. This is true whether or not the the land transfer is registered at a land registration office. In Ontario, land is defined as empty land, buildings on the land and all of the fixtures of those buildings, and any buildings that are supposed to be built on the land. 

The Ontario land transfer tax amount is based on the cost of the land, plus any amount remaining on the mortgage that was taken out or assumed to buy the land. This means that the more the land costs, the larger the land transfer tax will be. In special circumstances, the tax can be based on the land's fair market value, meaning a piece of land that is worth a lot of money will have a higher tax than land that is worth less. These special circumstances usually occur when the lease on the land is longer than 50 years, the land is owned by a corporation and is sold to a company shareholder, or the land is transferred from a private person to a publicly held corporation. 

Cities and towns in Ontario have an annual property tax on land within the city or town limits that must be paid. This is separate from the land transfer tax, which is a one-time tax that is imposed whenever land is transferred from one person or entity to another. Your real estate agent will explain any land transfer or property taxes to you prior to you assuming control of the land. You can also ask your city or town governing authority about any applicable taxes when buying or assuming control of land in Ontario.