What counts as 'consideration' for calculating Ontario land transfer tax?

Ontario land transfer tax is calculated on the "value of the consideration" for the transfer of land. This is broader than just the cash purchase price. Under the Land Transfer Tax Act, consideration includes all payments made or to be made in connection with the transfer — the purchase price, the amount of any existing mortgage the buyer assumes, the value of any services provided in exchange, and any other amounts the buyer agrees to pay to or for the benefit of the seller.

If a property is transferred for nominal or no consideration (such as in a gift), no LTT is generally payable — tax is based on what is actually given, including any mortgage assumed. Fair market value is substituted only in specific enumerated situations (for example, certain transfers to corporations, dispositions involving trusts, or foreclosures), or where value was in fact exchanged in another form.

This broad definition means buyers and their lawyers must carefully identify everything being exchanged in the transaction. Chattels (personal property like appliances) included in the purchase should ideally be valued and allocated in the agreement, because their value is not supposed to attract LTT, but the allocation must be reasonable.