Personal Law

In general, if you buy land or an interest in land in Ontario, you must pay land transfer tax. The land transfer tax payable is normally based on the purchase price. In some cases, land transfer tax is based on the fair market value of the land, for example, where:

• a lease can exceed 50 years;

• land is transferred from a corporation to one of its shareholders; or

• land is transferred to a corporation, if shares of the corporation are issued.

Land transfer tax is calculated as a percentage of the value of the consideration. These rates are currently as follows:

• 0.5% for amounts up to and including $55,000

• 1.0% for amounts exceeding $55,000 up to and including $250,000

• 1.5% for amounts exceeding $250,000 up to and including $400,000

• 2.0% for amounts exceeding $400,000

• 2.5% for amounts exceeding $2,000,000 where the land contains one or two single family residences

For a quick calculation of land transfer tax refer to the following list. Residential property refers to land containing one or two single family residences (SFRs) as defined by the Land Transfer Act. The Value of the Consideration for a conveyance or disposition is shown as ‘VC’. Land transfer tax payable is shown as ‘LTT’.

• LTT = VC × 0.005 up to and including $55,000

• LTT = (VC × 0.01) – $275 exceeding $55,000 and up to $250,000

• LTT = (VC × 0.015) – $1,525 exceeding $250,000, and up to $400,000

• LTT = (VC × 0.015) – $1,525 exceeding $250,000 up to $400,000, for residential property

• LTT = (VC × 0.02) – $3,525 exceeding $400,000, for property other than property with one or two SFRs

• LTT = (VC × 0.02) – $3,525 exceeding $400,000, and up to $2,000,000, for property with one or two SFRs

• LTT = (VC × 0.025) – $13,525 for property with one or two SFRs exceeding $2,000,000

If you meet the following requirements, then you can apply for a refund of the land transfer tax paid on the purchase of your first home:

• You cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.

• If you have a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world, while he or she was your spouse. If this is the case, no refund is available to either spouse.

• You must be at least 18 years of age.

• The application for a refund must be made within 18 months after the date on which the conveyance or disposition occurred. (Note that an application for the refund can be completed upon the electronic registration of the conveyance).

• You must occupy the home as your principal residence no later than nine months after the date of the conveyance or disposition.

The maximum amount refundable is $4,000. For example:

1. Cost of Home: $250,000

   Tax Payable: $2,225.00

   Tax Refund: $2,225.00

2. Cost of Home: $375,000

   Tax Payable: $4,100.00

   Tax Refund: $4,000.00

3. Cost of Home: $600,000

   Tax Payable: $8,475.00

   Tax Refund: $4,000.00

The word “title” refers to a person’s ownership interest in their property. By purchasing title insurance, homeowners are protecting their ownership of their property, and their lender’s priority in the mortgage against losses arising from various title and off-title risks. Policies can be issued in Canada for; residential dwellings of up to six units, vacant land, cottages, condominiums, co-operatives and leased land. For a one-time fee, some of the covered title risks for residential properties include:

• someone else owns an interest in your title

• existing liens against the title

• violations of municipal zoning by-laws

• encroachments onto an adjoining property (other than fences and boundary walls)

• setback violations

• realty tax arrears

• outstanding municipal utility charges, provided such charges form a lien on title

• existing work orders

• lack of legal access to the property

• unmarketability of the land due to adverse matters that would have been revealed by an up-to-date survey

• fraud, forgery and false impersonation to the extent they affect the validity of title

The total title insurance premium is often less expensive than the cost of obtaining an up-to-date survey and standard off-title searches. Title Insurance is generally acceptable to lenders in lieu of an up-to-date survey. This saves purchasers/borrowers the cost of obtaining a new survey and allows a transaction to close faster. 

Whether it is a house, condominium or cottage, title insurance brings security and peace of mind to lenders and homeowners during and after the transaction process, and could save them thousands of dollars should a claim arise. Title insurance has no deductible so the premium is truly a one-time fee. Coverage is valid for the entire time the homeowner holds title to the home.

In most cases, it is the seller who pays the real estate commission based on the listing agreement they signed with their realtor when they put their house up for sale.

Mortgage loan insurance is typically required by lenders when homebuyers make a down payment of less than 20% of the purchase price. Mortgage loan insurance helps protect lenders against mortgage default, and enables homebuyers to purchase homes with a minimum down payment of 5% — with interest rates comparable to those with a 20% down payment.

To obtain mortgage loan insurance, there is a premium charged to the lenders that is typically passed on to the homebuyer. The premium payable is based on a percentage of the home’s purchase price that is financed by a mortgage. The premium can be paid in a single lump sum, or it can be added to your mortgage and included in your monthly payments which is the customary approach.

Tarion Warranty Corporation protects the rights of new home buyers and regulates new home builders. Tarion is responsible for administering the Ontario New Home Warranties Plan Act, which outlines the warranty protection that new home and condominium builders must provide, by law, to their customers. The primary purpose of Tarion is to ensure that builders abide by this legislation, and protect consumers when builders fail to fulfill their warranty obligations.

Caveat emptor means “let the buyer beware”. It is a warning that notifies a buyer that the goods or property is being sold “as is,” or subject to all defects.  When a sale is subject to this warning or a statement that the property is being purchased “as is” the purchaser assumes the risk that the property may have a defect or be unsuitable for his or her needs. This rule is not designed to protect sellers who engage in fraud or bad faith dealing by making false or misleading representations. It merely summarizes the concept that a purchaser must examine, inspect and judge the property for himself or herself before deciding to purchase it.

A home inspection is a thorough visual assessment of a home conducted by a professional home inspector. A home inspector is not the same as a building inspector employed by the City or municipality to inspect new construction or renovations.

Home inspections occur before a home is sold, to reveal any issues that might become problems for the buyer. A home seller may also choose to have a home inspection done prior to listing a property, in order to avoid any unpleasant surprises during negotiations.

A home inspection will typically include a walk-through tour of the house during which the inspector will conduct a visual inspection of the condition of the property. The inspector will note any defects and deficiencies, then recommendations for repair are made. During the inspection, the inspector will look for issues that could have significant impact from a health and safety perspective, or from a financial standpoint.

https://news.ontario.ca/en/release/1007212/ontario-expanding-hst-rebate-to-lower-the-cost-of-new-homes-in-partnership-with-the-federal-government

Sales of used owner-occupied homes are usually exempt. In most cases, the GST/HST does not apply to the sale of an owner-occupied home since the owner is not a builder. Only homes sold by builders are taxable. An individual who builds, substantially renovates or buys a home for their personal use and not as a business or adventure in the nature of trade is not considered to be a builder for GST/HST purposes.

There are different rebates available for purchasers and first-time homebuyers of new builds.

HST New Housing Rebate

The Ontario New Housing HST Rebate is a provincial tax reduction of up to $24,000 (75% of the 8% provincial HST) for buyers of new or heavily renovated homes used as a primary residence. You may be eligible to claim the GST/HST new housing rebate for a house purchased from a builder for use as your (or your relation’s) primary place of residence if you are an individual and find yourself in one of the following situations:

• You purchased a new or substantially renovated house (building and land) from a builder

• You purchased a new or substantially renovated mobile or floating home from a builder (this includes the manufacturer or vendor)

• You purchased a share of the capital stock of a cooperative housing corporation (co-op) where the co-op paid tax on a new or substantially renovated house

• You purchased a new or substantially renovated house from a builder where you leased the land from that builder under the same agreement to buy the house and the lease is for 20 years or more or gives you the option to buy the land

If you are eligible, the builder may credit the rebate to you on closing of the transaction and have you assign the rebate to them. If the builder does not provide a credit on closing, there are forms on the CRA website which you would need to fill out and submit.

First-time Homebuyers’ (FTHB) GST/HST Rebate

The FTHB GST/HST rebate is for eligible individuals who are buying, building or substantially renovating their first home, which will be used as the individual’s primary place of residence. Agreements of Purchase and Sale must be entered into after March 20, 2025 and before 2031. Generally, to be considered a first-time home buyer, all of the following must be true:

• You are at least 18 years of age

• You are a Canadian citizen or permanent resident of Canada

• You have not lived in a home that you or your spouse or common-law partner owned, or jointly owned, whether in or outside of Canada, as your primary place of residence at any time in the calendar year or in the previous four calendar years

• You meet all of the criteria above on a specific date. This date will depend on whether you bought your home from a builder or built it yourself:

• Neither you, nor your spouse or common-law partner, have previously received an FTHB GST/HST rebate

Depending on the value of the home, the individual could recover up to 100% of the GST (or federal portion of the HST) paid, up to $50,000.

For new homes valued:

• At or below $1 million, the rebate is up to 100% (up to a maximum rebate of $50,000)

• Between $1 million and $1.5 million, the maximum rebate is gradually reduced

• At or above $1.5 million, there is no rebate

As a first-time home buyer, you may be eligible for the FTHB GST/HST rebate in addition to the existing GST/HST new housing rebate. Where both rebates apply, the FTHB GST/HST rebate acts as a top up to the existing GST/HST new housing rebate. Note, this rebate received Royal Assent on March 12, 2026, at which time the CRA started processing rebate claims.

Proposed Expansion to New Housing Rebate

On March 25, 2026, the Ontario government announced it would be partnering with the federal government to provide a temporary expansion of the new housing HST rebate by removing the full 13 per cent of the Harmonized Sales Tax (HST) for eligible buyers of new homes valued up to $1 million, for a maximum rebate of $130,000, as part of the upcoming 2026 Budget. This maximum rebate of $130,000 would be maintained for new homes valued up to $1.5 million, and would decrease proportionally from $130,000 at $1.5 million to a maximum of $24,000 for homes valued at $1.85 million and above, building on the province and federal government’s previous move to rebate the HST for all first-time buyers of new homes up to $1 million.

Agreements of Purchase and Sale must be signed between April 1, 2026, and March 31, 2027. Note, this announcement has not yet received Royal Assent. If you have signed an Agreement within the eligible timeframe and the transaction is completed prior to legislation passing, you would pay the applicable HST on your closing date. Assuming legislation is passed at a later date, you could then apply directly with the CRA for the rebate.

*Status as of April 2, 2026:

• Bill 97, Plan to Protect Ontario Act (Budget Measures), 2026 – Second Reading.

• C-26, An Act to authorize certain payments to be made out of the Consolidated Revenue Fund for the purpose of improving housing supply – First Reading Completed. No activity on Second Reading.

• Each requires readings to be completed through respective houses of legislature and Royal Assent

• CRA must update the Form 190 and worksheet to contemplate the expanded rebate

You can monitor the status of the Expanded New Housing Rebate here:
https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/gst-hst-rebates/new-housing-rebate.html