The City of Toronto passed the land transfer tax with a number of amendments which will take an estimated $150 million out of home buyers pockets next year and much, much more in years to come. The City also passed an amendment to grandfather all agreements of purchase and sale entered into prior to December 31, 2007, regardless of the closing date, through a rebate.

The new tax will take effect February 1, 2008. Purchasers with purchases after December 31, 2007, but closes before February 1, 2008, will not be required to pay the tax. The tax only applies to real estate transactions within the City of Toronto.  

The second land transfer tax, on top of the provincial land transfer tax, will be at the following rates:

Residential: (An easy-to-use residential calculator is available at www.NoHomeBuyingTax.com):

0.5% of the amount of the purchase price up to and including $55,000, plus
1% of the amount of the purchase price between $55,000 and $400,000, plus
2% of the amount of the purchase price above $400,000

Commercial / Industrial / Etc.:

0.5% of the amount of the purchase price up to and including $55,000, plus
1% of the amount of the purchase price between $55,000 and $400,000, plus
1.5% of the amount between $400,000 and $40 million, plus
1% of the amount above $40 million