What is the difference between land transfer tax and HST on a home purchase in Ontario?
Land transfer tax and HST are two entirely different charges that can both apply to Ontario property purchases, but they operate under different rules.
Ontario land transfer tax is a provincial levy paid by the buyer on every registered transfer of land, calculated on the purchase price using a graduated rate schedule. It applies to virtually all land purchases — resale homes, new construction, condos, commercial properties, and vacant land.
HST (Harmonized Sales Tax) is a federal-provincial consumption tax. It applies to the purchase of new construction homes and condos but generally does not apply to the resale (resale homes are used, not new goods). New residential construction may qualify for an HST New Housing Rebate or New Residential Rental Property Rebate that offsets part of the HST, subject to eligibility rules. Resale home buyers do not pay HST on the purchase price (though HST applies to some services like legal fees and home inspections).
Both charges can apply to new construction — so a new home buyer may owe both LTT and HST at closing.
Key takeaways
- LTT applies to all land transfers; HST applies to new construction, not resale homes.
- Both can apply simultaneously on a new construction purchase.
- HST rebates may reduce the HST burden on qualifying new homes.
- They are administered and remitted differently — your lawyer handles LTT, the builder handles HST.