In the City of Toronto, what combined land transfer tax rate applies to the portion of a single-family home's price between $400,000 and $2,000,000?
Correct Answer
B) 2.0% (Ontario) + 2.0% (Toronto) = 4.0%
The Land Transfer Tax Act charges 2.0% on the value above $400,000, and Toronto's MLTT charges 2.0% on the band from $400,000 to $2,000,000. The combined rate on that portion is therefore 4.0%.
Why This Is the Correct Answer
Ontario: 2% of the value of the consideration that exceeds $400,000 (s. 2(1) of the Land Transfer Tax Act). Toronto: 2.0% on $400,000.01 to $2,000,000. Together: 2.0% + 2.0% = 4.0% on that portion.
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In Toronto, what additional land transfer tax applies beyond the Ontario Land Transfer Tax?
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John and Mary are married and own three properties: their principal residence worth $600,000, a cottage they bought for $300,000, and a rental property worth $400,000. They sell the cottage for $450,000 after owning it for 6 years, all while resident in Canada. If they designate it as their principal residence for 4 of those 6 years, what portion of the capital gain is exempt from tax?