Real Estate Tax Checklist for Ontario Buyers, Sellers & Landlords

Every tax you might owe — and every filing you might miss — when you buy, sell, or rent property in Ontario.

Who this is for & what you'll get. This is for anyone buying a home, selling one, or earning rent in Ontario who wants a plain-language list of the taxes and filings that come with property. Work through the section that matches your situation and check off each item. Property is one of the most tax-heavy things most people ever touch — a single missed filing can cost more than the tax itself.

⚖️ This is a general guide, not legal advice. It can't account for your specific situation. Use it to get oriented, then confirm the details with a licensed Ontario lawyer.

🧾 One more thing: Treadstone Law is your lawyer, not your accountant. We close real estate deals and explain how the rules fit together, but we don't file your tax return or give tax advice. For your specific tax position, confirm with a tax professional (an accountant) and the Canada Revenue Agency (CRA). Property-tax rates, transfer-tax brackets, rebate amounts, and filing thresholds change — verify every figure as of the date you act.

How to use this checklist

Property tax issues come in three flavours depending on what you're doing: buying, selling, or renting out. Jump to the section that applies. Some people will tick boxes in more than one — for example, you may be selling one property and buying another in the same month, or renting one while you live in another.

A quick orientation to the players:

• Land Transfer Tax (LTT) is a provincial tax on the purchase — Ontario charges it, and the City of Toronto adds its own on top within city limits.
• HST (the harmonized federal + provincial sales tax) can apply to new construction and to commercial property.
• Capital gains and rental income are federal income tax matters reported on your return to the CRA.
• A few newer rules — the anti-flipping rule, the Non-Resident Speculation Tax, and the Underused Housing Tax (ended for 2025 and later years, but 2022–2024 returns can still be outstanding) — catch people off guard, so they get their own boxes below.

Section 1 — When you BUY

Land Transfer Tax and rebates

• Budget for Ontario Land Transfer Tax. This provincial tax is calculated on the purchase price and is paid at closing — it is not part of your mortgage. It is one of the largest closing costs after your down payment.
  • Why it matters: People routinely under-budget for LTT and get a nasty surprise on closing day. Ask your lawyer for the exact amount based on your price.
• If the property is in the City of Toronto, budget for the municipal LTT on top. Toronto levies its own land transfer tax in addition to the Ontario one. Properties elsewhere in Ontario pay only the provincial tax.
• Check whether you qualify for the first-time homebuyer LTT rebate. Ontario (and Toronto, separately) offers a rebate that can reduce or eliminate the tax for eligible first-time buyers.
  • Why it matters: The rebate has eligibility conditions (e.g., you generally must never have owned a home anywhere, and the same may apply to your spouse). The maximum rebate amount and the rules change — verify the current rebate and your eligibility with ServiceOntario and your lawyer.
• Confirm who is on title and how. How you take title (sole, joint tenants, tenants in common) can affect rebates, future capital gains, and estate planning. Decide this before closing.

HST on new construction

• Find out if HST applies to your purchase. A newly built or substantially renovated home from a builder is generally subject to HST. A resale (previously occupied) home generally is not.
  • Why it matters: On new builds, the price you see may or may not include HST. Read the agreement carefully and have your lawyer confirm.
• Check whether the price is quoted "HST included" or "plus HST." This single line can change your real cost dramatically.
• Apply for the New Housing Rebate if eligible. Buyers of qualifying new homes may claim a rebate of part of the HST. There is a version for owner-occupiers and a separate version for landlords who buy a new unit to rent out (often called the new residential rental property rebate).
  • Why it matters: Builders often credit this rebate against the price only if you intend to live in the home. If you're buying to rent, the path is different and the rebate is claimed separately. Eligibility and rebate amounts change — verify with the CRA.

Other buying considerations

• If you (the buyer) are not a Canadian citizen or permanent resident, check the Non-Resident Speculation Tax (NRST). See Section 4.
• Keep every closing document. Your statement of adjustments, the deed/transfer, and your lawyer's reporting letter all support the property's adjusted cost base — which you'll need years from now if you sell. (See the capital gains worksheet guide.)

✅ You're done with buying when: you know your full LTT cost, you've confirmed whether HST applies, you've claimed any rebate you qualify for, and you've filed away your closing package for safekeeping.

Section 2 — When you SELL

Your principal residence

• Determine whether the property was your principal residence. If a home was your principal residence for every year you owned it, the principal residence exemption (PRE) may shelter the capital gain from tax. ("Principal residence" generally means a home you ordinarily inhabited.)
• Report the sale on your tax return — even if the gain is fully exempt. Since the CRA tightened the rules, the sale of a principal residence generally must be reported and the property designated, even when no tax is owed.
  • Why it matters: Failing to report can put the exemption at risk and may trigger penalties. Confirm the current reporting requirement and forms with the CRA or your accountant.
• Watch for years the home was NOT your principal residence. If you rented it out for a stretch, or owned another home you designated instead, the exemption may be partial. (See our principal residence exemption guide.)

A property that is NOT your principal residence

• Calculate the capital gain on a cottage, rental, or investment property. Broadly: proceeds minus adjusted cost base minus selling costs = capital gain. A portion of that gain is included in your income and taxed.
  • Why it matters: The inclusion rate (the portion of the gain that is taxable) changes — do not assume last year's rate. Verify the current inclusion rate with the CRA.
• Gather your cost records. Original purchase price, closing costs, and the cost of capital improvements all increase your adjusted cost base and reduce your taxable gain. (Use the capital gains property worksheet.)
• Set aside cash for the tax. Tax on a capital gain is generally due when you file, not at closing. Don't spend all the proceeds.

The residential anti-flipping rule

• Check how long you owned the property before selling. Under the federal residential property anti-flipping rule, a residential property sold within a short holding period is generally treated as giving rise to fully taxable business income — not a capital gain — and the principal residence exemption may be denied.
  • Why it matters: This rule can turn an expected tax-free sale into a fully taxed one. There are exceptions for genuine life events (such as a death, separation, new job, or serious illness). The holding period and the exceptions are set by statute and can change — verify the current rule with the CRA before you sell.

If you (the seller) are a non-resident of Canada

• Plan for non-resident seller withholding and the clearance certificate process. When a non-resident of Canada sells Canadian real estate, special CRA procedures, withholding, and a clearance certificate generally apply.
  • Why it matters: The buyer's lawyer may hold back a significant portion of the proceeds until the CRA process is complete. Start early. Confirm the current process with the CRA and your advisors.

✅ You're done with selling when: you know whether the gain is exempt, you've reported the sale on your return, you've kept your cost records, and you've set aside money for any tax owing.

Section 3 — When you RENT IT OUT

Reporting rental income

• Report all rental income on your tax return. Rent you receive is taxable income, reported on the standard rental schedule (commonly Form T776 — verify the current form).
• Claim your eligible expenses against the rent. You can generally deduct reasonable expenses such as mortgage interest (not the principal portion), property tax, insurance, utilities you pay, repairs and maintenance, condo fees, property management, advertising, and certain professional fees.
  • Why it matters: Good records turn a scary tax bill into a manageable one. Keep every receipt. (See the rental property deduction checklist for the full list and the traps.)
• Understand current vs. capital expenses. A repair is usually deductible the year you incur it; a capital improvement is added to the property's cost and deducted differently over time.
• Be careful with Capital Cost Allowance (CCA). Claiming depreciation (CCA) on a rental can create "recapture" tax when you sell and can affect the principal residence exemption. Get advice before claiming it.
• Apportion personal use. If you rent only part of a property, or rent it only part of the year, you can generally deduct only the portion tied to earning rent.

Changing use

• Flag any change in use. Moving into a former rental, or renting out a former home, can trigger a deemed disposition (treated as a sale and repurchase at fair market value) for tax. This is easy to miss and can create tax with no cash changing hands. Confirm with your accountant.

✅ You're done with renting when: you've reported all rent, claimed only the expenses you can support with receipts, thought twice before claiming CCA, and flagged any change in use.

Section 4 — Special rules to check (any scenario)

Non-Resident Speculation Tax (NRST)

• If a buyer is a foreign national, foreign corporation, or taxable trustee, check the NRST. Ontario imposes this additional land transfer tax when certain non-residents buy residential property.
  • Why it matters: NRST is on top of regular LTT and can be substantial. Some rebates and exemptions exist. The NRST rate, scope, and rebate rules have changed several times — verify the current rules with ServiceOntario and your lawyer.

Underused Housing Tax (UHT)

• Check whether you have an outstanding UHT return for 2022–2024. The federal Underused Housing Tax was an annual tax (and, importantly, an annual filing requirement) aimed at certain vacant or underused residential property. It has been eliminated for the 2025 and later calendar years — no return is required and no tax is payable for those years — but the filing and payment obligation still applies to the 2022, 2023 and 2024 calendar years, and could catch certain owners, including some corporations, partnerships, and trustees, even when no tax was owed.
  • Why it matters: The penalties for failing to file for a year the tax applied were severe even where the tax itself was zero. Most individual Canadian citizens and permanent residents were excluded, but ownership through a corporation, partnership, or trust could pull you in. If you may have missed a 2022–2024 return, verify your obligation with the CRA.

GST/HST on commercial property

• If the property is commercial, treat HST as a live issue at every stage. Unlike most resale homes, the sale and lease of commercial real estate is generally subject to GST/HST. Registered buyers may be able to self-assess rather than pay HST to the seller on closing.
  • Why it matters: HST on a commercial purchase can be a large number. Whether it's payable, recoverable as an input tax credit, or self-assessed depends on registration and use. Get tax and legal advice before you sign.

Quick-reference: which taxes touch which transaction?

(● = commonly applies. Your facts may differ — confirm with the CRA and your advisors.)

Mini-FAQ

Do I owe tax just for buying a home? You don't pay income tax to buy, but you do pay Land Transfer Tax (and Toronto's municipal LTT if applicable), and possibly HST on a new build. Budget for these at closing.

I sold my home and made no profit after costs — do I still have to tell the CRA? Generally yes. Even a fully exempt principal residence sale is expected to be reported on your return. Confirm the current requirement with the CRA.

Is my cottage covered by the principal residence exemption? It can be — you can designate a cottage as your principal residence for some years — but only one property per family unit per year qualifies, so designating the cottage may expose your city home. Get advice before deciding.

What's next

Work through the section that fits your situation, keep your closing and cost documents in one place, and bring any uncertain item to a professional before you sign or file. The cheapest tax problem is the one you spot early.

How Treadstone Law can help

Treadstone Law is a digital-first Ontario law firm built for clear pricing and online convenience. We handle real estate closings across Ontario and help you understand how the tax rules above fit your purchase or sale — and we'll tell you plainly when something belongs with your accountant.

• Flat fees for real estate and many other matters — no surprises.
• Start online in minutes, from anywhere in Ontario.
• Talk to a person: call 1-844-900-1070.

Explore real estate and tax services, see transparent pricing, or start a file online.

This is not legal advice

This guide is general information, not legal advice. Reading it does not create a lawyer-client relationship. Ontario laws, tax rates, and government programs change, and how the law applies depends on your specific facts. For advice about your situation, speak with a licensed Ontario lawyer. Treadstone Law is licensed by the Law Society of Ontario — reach us at 1-844-900-1070 or start a file online.