Do I pay land transfer tax as a seller?
Do I pay land transfer tax as a seller? Spoiler: 99% of Georgetown home sellers don’t — but there are smart exceptions and costs you can’t ignore.
Quick, honest answer every Georgetown homeowner needs
No. In Ontario, including Georgetown (Halton Hills), land transfer tax (LTT) is paid by the buyer — not the seller. That’s the rule. But don’t stop there. Selling a home still triggers other taxes, fees, and adjustments that change your net proceeds. If you want to maximize what you keep, read every section below.
Why buyers pay land transfer tax — and what it means for you
Land transfer tax is a provincial tax applied at the time title changes hands. Ontario’s LTT schedule (current):
- 0.5% on the first $55,000
- 1.0% on the portion from $55,000 to $250,000
- 1.5% on the portion from $250,000 to $400,000
- 2.0% on the portion from $400,000 to $2,000,000
- 2.5% on the portion above $2,000,000
Georgetown sellers should note: Toronto’s municipal land transfer tax only applies inside Toronto. Georgetown is in Halton Hills, so buyers here only pay the Ontario LTT. That can affect buyer affordability and market demand — both critical to pricing and timing your sale.
Taxes and costs sellers in Georgetown DO need to plan for
Even though you don’t pay LTT as seller, these items reduce your net proceeds and must be planned for:
- Realtor commission: Typically 4–6% of sale price, negotiable. This is usually the largest single cost.
- Legal fees and disbursements: Expect several hundred to a couple thousand dollars depending on complexity.
- Mortgage discharge penalties or administrative fees: Check your lender’s terms.
- Property tax adjustments: Municipal taxes are prorated at closing. If you prepaid, you may receive a credit; if not, you may owe.
- Capital gains tax: If the sold property is not your principal residence for every year you owned it (for example, rental or part-time property), you may owe tax on the capital gain. Taxable gain = sale price minus adjusted cost base (purchase price + eligible improvements) minus selling costs.
- HST (GST) on new or substantially renovated homes or commercial properties: Resale homes are generally exempt, but new-builds and certain flips can trigger HST obligations.
- Utilities, condo adjustments, home warranty transfers, and closing-day adjustments: Small but important.
Capital gains: the single biggest tax risk for sellers
If your house was your principal residence for all the years you owned it, you likely pay no capital gains tax thanks to the Principal Residence Exemption. If not, you must report the capital gain and pay tax on the taxable portion.
Key actions:
- Document periods of residence carefully. Keep purchase/sale documents, utility bills, insurance records showing your primary address.
- Track capital improvements with receipts. Renovations that increase value raise your adjusted cost base and reduce taxable gain.
- If you rented the property for part of the ownership, get professional tax advice — the math can get complex.
HST and commercial sales: watch for traps
HST doesn’t normally apply on resale houses sold as single-family residences. But watch for these triggers:
- New-build homes or homes sold by builders: HST applies. Buyers often get rebates, but the sale structure matters.
- Commercial properties or mixed-use properties: HST can apply and needs careful allocation.
- Sales by HST registrants or businesses (e.g., property developers): Different rules apply.
If your sale could be in any of these categories, involve an experienced tax accountant and solicitor early.
Non-tax costs that look like taxes — closing adjustments and liens
Sellers sometimes get surprised by non-tax items that reduce proceeds:
- Outstanding municipal charges and local improvements
- Outstanding utility bills and condo arrears
- Title liabilities or liens that must be cleared before closing
A pre-closing title search by your lawyer will flag these. Resolve early to avoid last-minute price reductions.
Pricing strategy in Georgetown: how LTT affects demand — and your price
Buyers in Georgetown budget for Ontario LTT. If your market attracts Toronto commuters or investors, they’ll be sensitive to closing costs and affordability. Two implications for pricing and marketing:
- Price with buyer affordability in mind: high LTT on next purchase can reduce competition for higher-priced homes. Position your house competitively.
- Offer certainty and speed: buyers who aren’t first-time buyers are comfortable with LTT, but many buyers want a smooth, fast close. Reduce friction by having inspections, permits, and disclosure documents ready.
Timing your sale to minimize taxes and maximize proceeds
- If you’re nearing a milestone that affects your principal residence designation, time the sale to maximize tax-free years.
- If you’ve been renting and want to claim principal residence for part of the ownership period, speak to a tax professional about eligibility and reporting.
- If you plan to purchase another home after selling, recognize you’ll likely pay LTT as a buyer on the new property — budget for both the new down payment and the LTT liability.
Practical checklist for Georgetown sellers: act like a pro
- Verify your principal residence status with your accountant.
- Collect documents proving residence and capital improvements.
- Get a current mortgage payout statement and ask about discharge fees.
- Order a pre-listing inspection to avoid surprises and speed closing.
- Discuss sale structure with your lawyer if the property was used for rental or business.
- Price to account for buyer LTT sensitivity — consult your realtor for local comps.
- Budget for realtor commissions, legal fees, mortgage penalties, and prorated taxes.
- If selling a new build or commercial property, get HST guidance immediately.
Why local expertise matters: Georgetown is not Toronto
Georgetown sits in Halton Hills — local market dynamics, commuting patterns, school zones, and municipal processes matter. You need a realtor who understands:
- How Halton’s market data affects list price and days on market
- Local municipal tax statements and closing-day proration nuances
- Buyer profiles in Georgetown (families, Toronto commuters, investors)
That’s where local consulting matters. Generic advice misses local quirks that cost you money.
Work with a local pro: get the numbers right before you sign anything
I work with a network of real estate lawyers and tax accountants in Halton who specialize in accurately calculating tax exposure and closing costs. If you want a clear run-through of your expected net proceeds, including any capital gains exposure, mortgage penalties, and realistic closing adjustments, reach out.
Contact: Tony Sousa — Local Realtor & Georgetown expert
- Email: tony@sousasells.ca
- Phone: 416-477-2620
- Website: https://www.sousasells.ca
I’ll give you a straightforward, no-fluff estimate of your net proceeds and a clear plan to maximize what you walk away with.
FAQ — Land transfer tax and taxes for Georgetown home sellers
Do sellers ever pay land transfer tax in Ontario?
No. The standard legal position is buyers pay Ontario land transfer tax when title transfers. Sellers don’t pay LTT on a standard resale transaction.
What taxes should I expect to pay when I sell my home in Georgetown?
Most sellers pay no LTT, but expect realtor commissions, legal fees, possible mortgage discharge fees, prorated property taxes, and potentially capital gains tax if the property wasn’t your principal residence for the entire ownership period.
Will selling my house trigger capital gains tax?
Only if the property wasn’t your principal residence for every year you owned it, or if it was used to produce income (e.g., rented out). Keep records of your residency and improvements.
Do I have to charge HST when I sell my home?
Resale single-family homes are generally exempt from HST. HST applies to new homes, substantial renovations, or commercial property transactions. If you or your buyer are unsure, get a tax professional involved.
Does the municipal land transfer tax in Toronto affect Georgetown sellers?
No. Toronto’s municipal land transfer tax only applies to properties located in the City of Toronto. Georgetown is in Halton Hills; only Ontario’s provincial LTT applies to buyers here.
What about foreign buyers or NRST?
Ontario’s Non-Resident Speculation Tax (NRST) affects certain purchases but is buyer-focused. Sellers typically won’t pay NRST. If you’re selling to a non-resident buyer, the buyer may be subject to NRST — consult your lawyer.
How can I reduce my tax bill from a sale?
If you qualify for the Principal Residence Exemption, ensure you claim it. Document improvements to increase your adjusted cost base. Consult with a tax professional to review any rental income period or business use that will affect taxes.
Who should I call to get final numbers for my sale?
Call a local real estate lawyer and a tax accountant experienced in Ontario property sales. Or contact a seasoned Georgetown realtor who works with those pros daily.
If you’re selling in Georgetown and want a clear, no-nonsense breakdown of what you’ll actually keep after taxes and costs, email tony@sousasells.ca or call 416-477-2620. I’ll walk you through the exact numbers and a plan to protect your proceeds.
Disclaimer: This post is for informational purposes and does not replace professional legal or tax advice. Always consult a qualified tax professional and your real estate lawyer before making decisions.
