Do I need to pay land transfer tax as a seller?
“Do I have to pay land transfer tax as a seller?” — No. But read this before you sign.
Quick answer up front
No. In Ontario the land transfer tax (LTT) is normally paid by the buyer. If you’re selling a home in Georgetown (Halton Hills), you will not be billed provincial or municipal LTT at closing — unless you explicitly agree to pay it in the contract. Know this and you avoid panic and bad negotiations.
Why buyers pay land transfer tax — plain and simple
Land transfer tax is a tax on the transfer of title. Ontario’s provincial law places the obligation on the purchaser to calculate and pay LTT when the property transfers. Municipal LTT exists only in certain cities (notably Toronto). Halton Hills and other Halton Region municipalities do not charge a municipal land transfer tax. That means the buyer brings LTT funds to closing, not the seller.
This is standard across most Canadian provinces: buyers pay transfer taxes. Sellers pay other costs. Know the difference.
Common seller costs you actually need to plan for
If you’re selling in Georgetown, expect these real costs and prepare for them. They matter more than land transfer tax.
- Realtor commissions: Typically 3–5% of sale price split between listing and buyer’s agents. Negotiate, but expect to pay a commission unless you list otherwise.
- Legal fees and disbursements: Your lawyer will prepare documents, handle mortgage discharge, complete statement of adjustments. Budget $800–$2,000 depending on complexity.
- Mortgage payout and discharge penalty: Mortgage balance plus any prepayment penalty. Ask your lender for a payout statement early.
- Adjustments: You’ll credit the buyer for prepaid property taxes, condo fees, utilities, and other prorated items. These appear on the statement of adjustments.
- Repairs or compliance items required by the buyer’s conditions: These are negotiable and sometimes asked for at inspection.
- Capital gains tax (if applicable): If the property is not your principal residence, capital gains tax can apply. Keep records for tax reporting.
These are the real line items that reduce your net proceeds.
Exceptions and scenarios where a seller might indirectly cover LTT
The short answer above is clear, but real life has exceptions. Here are the scenarios to watch for:
1) Contract terms where seller agrees to a concession. You can agree to pay the buyer’s LTT as part of the sale price negotiation. This happens when a sale is slow or buyers ask for help. This is a negotiated cost — not a statutory obligation.
2) Assignment sales of new-build units. If you’re assigning a purchase contract for a new condominium (before registration), the tax treatment can be complex. Assignment profits can attract HST or other tax consequences. Always get legal and tax advice.
3) Commercial land or unusual structures. Some commercial transactions and non-standard transfers have different tax rules. Get a lawyer.
4) If you are the buyer in a chained transaction and you re-buy another property, your obligations change — but that doesn’t make you the seller’s LTT payer.
Bottom line: the seller pays LTT only if they willingly absorb it in negotiation or are involved in a special transaction type.
HST and resale homes — what sellers in Georgetown must know
Most resale residential homes are HST-exempt. That means a private homeowner selling their lived-in house will not charge HST to the buyer. Builders and developers selling a new build must collect HST. If your sale is a new home or you’re a builder, HST rules apply and can change the money flow dramatically.
If part of your property was used for business or you rented units, HST and input tax credits may come into play. Talk to an accountant.
Capital gains — the tax that surprises many sellers
If the house is your primary residence for every year you owned it, you usually qualify for the principal residence exemption and pay no capital gains tax. If you used part of the property for rentals, a home office, or it wasn’t your primary residence, you may owe tax on the capital gain. Keep clean records of purchase price, improvement costs, and the date ranges of use.
Always get tax advice before closing if you suspect a capital gain.
The closing checklist every Georgetown seller needs
Don’t be the seller who shows up unprepared. Use this checklist:
- Get a mortgage payout statement from your lender early.
- Hire a real estate lawyer in Halton Region. They will prepare the deed, discharge the mortgage, and calculate adjustments.
- Ask your lawyer to confirm whether any municipal levies or special local charges exist (rare in Halton Hills, but possible for specific developments).
- Prepare the property tax and utility receipts to make adjustments smooth.
- Review the statement of adjustments with your lawyer before signing.
- Confirm when keys and possession are transferred.
This reduces surprises and keeps closing clean.
Negotiation tip: use LTT to win deals — not to lose money
If you want to make your listing more attractive, offering to contribute to buyer closing costs can help. But don’t promise to pay LTT by default. Instead, offer a fixed credit toward closing costs or a small price reduction. That keeps your math clean and prevents you from being asked for unlimited concessions.
If a buyer asks you to cover LTT, say yes only if the math is clear and the total concession is capped in the contract.
Local rules for Georgetown sellers — what’s unique
Georgetown is in Halton Hills, Halton Region. No municipal land transfer tax applies here. Municipal tax rules and development charges can differ between municipalities, but standard LTT rules remain: buyer pays. Local lawyers and realtors will handle the small local variances like tax roll numbers, utility debits, and regional levies.
If you’re selling a property in a new subdivision or a condo coming out of developer control, the developer’s terms and local municipal agreements may create unique line items. Ask your lawyer.
When to call a pro — and what to ask
Call a real estate lawyer if any of these apply:
- You’re selling a new-build or assignment.
- The property was used for rental or business.
- You suspect capital gains tax applies.
- The buyer asks you to pay LTT or other unusual concessions.
Ask the lawyer to: confirm whether you owe any taxes, prepare the discharge of mortgage, calculate the statement of adjustments, and ensure title transfers cleanly.
Why you should work with a local expert
Local realtors and lawyers know the Halton Hills quirks. They know municipal billing cycles, typical adjustment items, and what buffers buyers expect. That prevents last-minute hold-ups and protects your net proceeds.
If you want an experienced local agent who handles the legal and paperwork side cleanly, reach out below.
FAQ — Quick answers Georgetown sellers need
Q: Do sellers ever pay land transfer tax in Ontario?
A: Only if they agree to pay it in the contract or if involved in a special transaction (assignment, commercial sale). Statutory obligation lies with the buyer.
Q: Is there a municipal land transfer tax in Georgetown?
A: No. Georgetown (Halton Hills) does not charge a municipal land transfer tax. Toronto is the main Ontario city that does.
Q: Will HST apply when I sell my house?
A: Most resale homes are HST-exempt. HST applies to new homes sold by builders or when the seller is in the business of selling homes.
Q: Could the buyer ask me to cover LTT?
A: Yes. Buyers can negotiate sellers to cover LTT as a concession. That’s voluntary and should be capped in the contract.
Q: What closing costs should I budget for as a seller?
A: Realtor commission, legal fees, mortgage discharge, adjustments for taxes/condo fees, and any negotiated repairs or concessions.
Q: Does selling my principal residence trigger capital gains tax?
A: Usually no. The principal residence exemption covers gains if the property was your principal residence for the years you owned it. Partial use for business or rentals changes this.
Q: Who handles LTT payment at closing?
A: The buyer’s lawyer or notary calculates and pays provincial LTT (and municipal LTT where applicable) at closing, drawing on funds from the buyer’s certified funds.
Q: What if I’m selling a condo or new-build?
A: New builds and assignment sales have special rules — HST and assignment profits can create tax consequences. Use a lawyer and accountant.
Q: Can unpaid property taxes affect closing?
A: Yes. Outstanding taxes can be registered as a lien and must be resolved before or at closing. The statement of adjustments will address prorated taxes.
Q: How do I find a qualified local real estate lawyer?
A: Ask your listing agent for a recommended Halton Region lawyer. Confirm their experience with residential closings in Georgetown.
If you want a local expert to walk you through closing costs, review offers, and protect your net proceeds, I can help. Reach out to Tony Sousa — Local Realtor for Georgetown and Halton Hills.
Email: tony@sousasells.ca
Phone: 416-477-2620
Website: https://www.sousasells.ca
Call before you sign. One quick call prevents costly mistakes at closing.
