In this text, we will try to answer the question: Can you save on land tax transfer?

Land transfer tax (LTT) is a fee assessed on any property sale transaction in Ontario and elsewhere, often by all provinces and municipalities. There may be certain circumstances when you can save on this fee, however.

Housing is a pressing problem in many countries. There simply aren’t enough homes available, and most people cannot afford the expensive prices associated with home purchases.

First-time homebuyer rebates

First-time homebuyer rebates may reduce the amount you need to spend when buying your first house. Programs vary from state and city, but it’s worth exploring whether such rebates exist in your state and city – they typically offer rebates on mortgage interest and insurance, points, and property taxes which often prove much bigger savings than typical tax deductions available to homeowners.

U.S. cities offer first-time homebuyer rebates to encourage them to become homeowners for the first time, such as state and local governments or mortgage lenders and financial institutions. To qualify, a homeowner must be new and never have been an owner before – these rebates typically appear as tax credits on your federal income tax returns.

As a first-time homebuyer in Canada, you could receive up to $750 in rebates on GST and HST that you pay when buying or renovating an existing one, and may also claim one on costs associated with converting non-residential property into residential use. Furthermore, Canada provides an RRSP Homebuyers Plan which enables withdrawal of up to $35,000 from an RRSP so it can go toward purchasing your first home.

Tax-free sales

Are You A First-Time Homebuyer? Apply for a Rebate of Land Transfer Tax

Land transfer taxes are generally paid by the buyer rather than seller; however, some provinces or municipalities require the seller to contribute a small share. The exact amount varies by province or municipality but usually corresponds with the property value.

Example: When purchasing a $500,000 house in Toronto, a municipal land transfer tax of $6,475 must be paid; if eligible for the provincial first-time homebuyer rebate however, up to $4,475 could be saved off this fee.

To qualify for this rebate, it is essential that you have never owned any interest in a home anywhere before in the world. Each province and municipality has different rules regarding exemption, and for further guidance it’s advisable to speak to a tax specialist. In certain circumstances it may be possible to bypass paying land transfer tax by transferring title into a bare trust; however this practice should only be undertaken with caution as it could prove costly in the long run.

Tax-free purchases

Land transfer tax is one of the many closing costs buyers must cover when buying a home, yet its payment can seem like an intimidating sum. But there are ways to cut this expense without resorting to tax fraud or breaking the law; an efficient strategy would be qualifying for a first-time homebuyer rebate; though eligibility criteria can differ depending on your location.

Stamp Duty Land Tax (SDLT) costs vary based on the value of property you’re selling or buying, with payment required when any interest in land or property changes hands and you offer anything of monetary value such as cash payment, taking on liability for an existing mortgage balance or covering legal fees as a part exchange consideration.

Example: If you purchased a $500,000 home in Toronto, the provincial portion of your tax liability would be $6,475, but an additional municipal land transfer tax bill of $12,950 must also be paid.

If you inherit property from a deceased relative, typically no SDLT will apply provided there was no other consideration given in exchange for your inheritance. For instance, if you inherit half of their share without receiving cash compensation or taking on liability for any mortgage costs from them – this would qualify as a gift for which no SDLT should be payable.


Tax exemptions vary by state and can save you thousands. Exemptions from land transfer taxes differ from property tax deductions in that they can often be harder to acquire; to get accurate advice regarding your specific situation it is wise to consult a financial professional or real estate agent.

One important consideration when selling real estate is that the seller typically pays transfer tax; this is especially true of new developments. However, in softer markets this could potentially be negotiated as part of the sale agreement.

Oftentimes, the only way to sidestep transfer taxes is by giving property away to a non-profit or government organization that will use the proceeds for various projects such as parks, open space protection, low income and affordable housing programs, infrastructure projects etc.

However, transfer taxes remain due when real property is transferred to either a lineal descendant or sold to an entity owned by a foreign government and used for diplomatic or consular purposes – situations which often elicit interpretation and legal review.

Usually in New York, buyers are responsible for paying the transfer tax; however, this may be shared between buyer and seller depending on whether multiple properties are being sold at once and/or who holds record of mortgage payments. According to Viva Escrow’s website, sellers often cover an additional 1% real estate transfer tax payment in Southern California.

The final bill often depends heavily on who is holding the loan and who decides to cover the transfer taxes. Shopping around for the best TD, ScotiaBank, RBC, BMO, CIBC mortgage rates can assist you in figuring up the best option, as the interest rate you pay will have an impact on transfer tax costs.