Is land transfer tax charged when buying vacant land in Ontario?
Yes, Ontario land transfer tax applies to purchases of vacant land just as it does to improved property. Whenever a deed or transfer of ownership of land is registered in Ontario, the buyer must pay LTT on the value of the consideration.
For vacant land, the value of the consideration is generally the agreed purchase price. There is no separate rate schedule for vacant land — the same graduated provincial rate structure that applies to residential and commercial properties applies here. If you are buying vacant land within the City of Toronto, the municipal LTT also applies.
One distinction worth noting: the residential first-time buyer LTT rebate is designed for property you intend to occupy as your principal residence, so it generally would not apply to raw land being acquired for development unless a home will be built and occupied. Discuss your specific situation with a lawyer to understand what rebates, if any, might be available.
Key takeaways
- Ontario LTT applies to vacant land purchases the same as any other real property.
- The graduated provincial rate schedule applies regardless of whether land is improved.
- Toronto land purchases also attract the municipal LTT.
- The first-time buyer rebate typically does not apply to raw land held for development.