Do I pay land transfer tax as a seller?
Think sellers secretly owe land transfer tax? Here’s the blunt truth that will save you time and money.
Quick answer
No — in almost every standard residential sale in Ontario and most Canadian provinces, the buyer pays the land transfer tax (LTT). If you’re selling, you rarely remit LTT at closing. That’s the rule. Plain and simple.
Why this matters
Buyers budgeting for closing costs include LTT. Sellers budgeting for closing costs should focus on realtor commissions, legal fees, mortgage discharge penalties, property tax adjustments, and potential capital gains tax — not the LTT.
Common exceptions and edge cases
- Assignment or vendor take-back deals: Complex structures can shift costs. Always check your purchase agreement and lawyer’s advice.
- Commercial or corporate asset transfers: Different rules can apply in corporate reorganizations or when property changes hands between related parties.
- Non-resident buyers or special rebates: Some buyer rebates or surtaxes can change net calculations, but these affect the buyer’s bill, not the seller’s obligation.
What sellers actually pay
- Realtor commission (typically 3–5% combined) — the biggest chunk.\
- Legal fees and title work.\
- Mortgage discharge penalties (if you pay out a mortgage early).\
- Capital gains tax on profit if the property isn’t your principal residence.\
- Utility, condo fees, and property tax adjustments on closing.
Practical steps every seller should take right now
- Confirm who pays what in your Agreement of Purchase and Sale. Don’t assume.\
- Talk to your real estate lawyer before signing. They’ll flag odd clauses that could shift tax liabilities.\
- Get a pre-listing tax check: confirm principal residence exemption eligibility to avoid surprises from capital gains.\
- Price for commissions and legal costs, not LTT — it won’t be on your bill unless you agree otherwise.\
- If a buyer asks you to cover buyer costs: counter with price adjustments or concessions tied to net proceeds, not a unilateral payment.
Local note for Toronto and Ontario sellers
Toronto has both provincial LTT and a municipal LTT — both are typically buyer obligations. Sellers in Toronto should be aware buyers will factor both into offers. Use this to your advantage in negotiations.
Final takeaway from an experienced realtor
If someone tells you sellers always pay land transfer tax, stop and get a second opinion. The buyer normally pays LTT. Your real exposure as a seller is capital gains tax and closing costs like commissions and legal fees. Be deliberate: get legal advice, confirm terms in writing, and price or negotiate with the right items in mind.
Need tailored advice for your property or to run the numbers for net proceeds? Contact Tony Sousa — local realtor, taxes and financial considerations expert.
Email: tony@sousasells.ca\
Phone: 416-477-2620\
Website: https://www.sousasells.ca
