Does land transfer tax apply when a property is transferred to or from a corporation in Ontario?

Transferring real property to or from a corporation in Ontario generally triggers land transfer tax, even if no cash changes hands. Because a corporation is a separate legal person from its shareholders, a transfer of land between an individual and their own corporation (or between related corporations) is a registrable transfer of land subject to LTT.

There is a limited exemption under the Land Transfer Tax Act for certain transfers to closely held corporations where the transferor and the corporation have specified familial or ownership relationships and certain conditions are met. These exemptions are technical and not automatic — specific criteria must be satisfied and specific documentation must be filed.

Family farm corporations and reorganizations under tax planning structures sometimes qualify for exemptions, but each situation must be assessed individually. The rules are detailed enough that many corporate restructurings that seem to qualify do not, or require careful planning to fall within the exemption. Always have a lawyer and tax advisor review any proposed corporate transfer of land before proceeding.