If I exchange my property for someone else's property in Ontario, how is land transfer tax calculated?

A property exchange (swap) in Ontario involves two simultaneous land transfers, and each buyer owes LTT on the consideration they are receiving. The value of consideration is not just cash — it includes non-monetary exchanges. When you swap properties, the value you give (your property) is the consideration for what you receive (the other property), and vice versa.

In practice, each party to the exchange is assessed LTT based on the fair market value of the property they are receiving, adjusted for any cash or mortgage components included in the deal. If the properties are of different values and one party pays a cash top-up, that is factored into each party's calculation as well.

Property swaps that are structured to avoid or minimize LTT are subject to scrutiny by the Ministry of Finance, which can look at fair market value rather than nominal consideration when the exchange price appears artificially low. Each party to a property exchange should have their own real estate lawyer review the transaction and calculate the correct LTT before completing the transfer.