Can the Ontario government reassess land transfer tax years after a closing?

Yes, the Ontario Ministry of Finance has the authority to reassess land transfer tax long after a transaction closes. The Ministry can audit LTT filings and issue reassessments if it believes the declared consideration was understated, an exemption was improperly claimed, or LTT was not paid in full.

Limitation periods for LTT reassessments are set by provincial legislation and differ from the general civil limitation period. Where there has been misrepresentation or fraud in the LTT affidavit, the Ministry's ability to reassess can extend further. In ordinary cases without misrepresentation, there is still a meaningful window during which an audit can occur.

If you receive a Notice of Reassessment or an audit inquiry from the Ministry of Finance related to LTT, you should contact a real estate or tax lawyer promptly. You have rights to object and appeal, but there are deadlines for doing so. Keeping your closing documents, the purchase agreement, and any correspondence about the transaction in accessible storage is a practical step that many buyers overlook.