In Ontario, what is the standard Land Transfer Tax rate for a residential property purchase of $400,000?
Correct Answer
D) 0.5% on first $55,000, 1.0% on next $195,000, 1.5% on remaining amount
Ontario's Land Transfer Tax is graduated: 0.5% up to $55,000, 1.0% from $55,000 to $250,000, 1.5% from $250,000 to $400,000, and 2.0% above $400,000 (plus 0.5% above $2,000,000 for land with one or two single-family homes). At exactly $400,000 the top 1.5% bracket covers the remaining $150,000, so the tax is $275 + $1,950 + $2,250 = $4,475.
Why This Is the Correct Answer
This is correct because the tax is applied in slices: 0.5% on the first $55,000, 1.0% on the next $195,000, and 1.5% on the remaining $150,000 up to $400,000. The result is $4,475.
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A buyer who is not a first-time buyer purchases a single-family home in the City of Toronto for $1,000,000. What is the total provincial and municipal land transfer tax payable?