Smart Ways To Avoid Paying Land Transfer Taxes In Canada
Investors who want to purchase land or land interests in Canada have to pay land transfer taxes. In this context, land denotes existing buildings, off the plan constructions and their fixtures. As a buyer, you need to pay transfer taxes before the purchase of the said land is sealed. Land investors are always hunting for openings and situations that could see them getting full relief from transfer taxes.
Even though there are rebates and refunds, you need to know that there are smart ways you could follow and avoid paying land transfer fees. Apparently, you will qualify for a transfer tax exemption if you are transferring land to your partner due to love and affection. Ownership transfer between a trustee and a beneficiary is another way to avoid paying land transfer taxes. You will avoid taxation if the land transfer deal is between an entity and their family business holding.
You can keep land transfer tax costs at bay if you are transferring land that is not a party to a mortgage. There are transfers between spouses that are free from land transfer tax obligations. It’s possible to avoid paying transfer taxes if you are bankrupt and the property in question is within your estate. If you are purchasing a new home; you won’t have to bother about land transfer tax since the newly built home exemption gives you the liberty.
You need to remember that a newly built house in this context means a house built or mounted on a vacant piece of land. There are transfers to specific organizations that exempt you from paying land transfer taxes. You will avoid land transfer tax if you are dealing with a municipality, a trust body, schools or hospitals. In some provinces, first-time buyers, will be exempted from land transfer fees as long as they fulfill certain obligations.
You only get land transfer tax exempted if you are past 18 years and you have occupied the home in under nine months since the sale was closed. Remember, the first-time buyer is only eligible if they haven’t bought a home elsewhere and their spouses should be first-time buyers as well. Ontario residents will get relief with land transfer tax if they buy a home ranging from $227,000 and below.
Overwhelmed by the Complexity of Mortgages? This May Help
In Toronto, first time home buyers need to purchase property of up to $400,000 or less to get the exemption. Divorce carries a lot of weight with it but you will get off the land transfer tax hook if you are separating. You are free from paying land transfer tax if you are transferring property to your spouse as long as there is a court order enforcing your separation.The Key Elements of Great Resources