Land transfer tax is a provincial tax levied on newly acquired land. In nearly every province in Canada (with the exception of Alberta and Saskatchewan), when you purchase a property, you’ll be required to pay a percentage of the property value as a lump sum once the transaction has closed.

In most provinces in Canada, anyone who acquires a piece of land or a beneficial interest in a piece of land is required to pay land transfer taxes to the provincial government once the transaction has closed. The land transfer taxes must be paid in full at that time, and should be accounted for when putting aside funds for closing costs.  The only provinces that have no land transfer tax are Alberta and Saskatchewan.

If you acquire property in Alberta or Saskatchewan, you can avoid paying land transfer tax, as it is not charged by either province.

If you are acquiring property elsewhere in Canada, you can typically avoid paying land transfer taxes under the following circumstances:

• The property is being transferred from a parent to a child.
• The property is being transferred between spouses.
• The property is being transferred from a person to a family business.
• The property is a farm property being transferred between family members.

Please note that the above list is not exhaustive, and you should always get specific details from your local provincial government or seek counsel from an expert (e.g. an accountant) before determining that you do not have to pay land transfer taxes.

There are land transfer rebates available in some provinces. In Ontario, for example, there is a land transfer rebate of up to $4,000 available to first-time home buyers. Similarly, in British Columbia, first-time home buyers are eligible to receive a full land transfer tax refund on homes up to $500,000, and a partial refund on homes from $500,000 - $525,000. In other provinces, like Quebec and Manitoba, there are no land transfer rebates.