Refunds of Land Transfer Tax

• This bulletin outlines the procedures to apply for refunds of land transfer tax.
• This bulletin replaces Land Transfer Tax Information Bulletin 1-79 (February 1979).
• The information in this bulletin does not replace the law found in the Land Transfer Tax Act (Act) and related regulations.

Types of Refunds

The Minister of Finance may refund all or part of the land transfer tax paid when: tax is overpaid, the applicant is a first time purchaser of a newly constructed home, or the transfer has not taken place.

Overpayment of Tax

Examples of overpayment of tax are:

• Error in the Calculation of Tax Paid, e.g. an incorrect value of the consideration is declared when registering a document electronically.
• Wrong Rate of Tax Applied to the Value of the Consideration, e.g. where the value of the consideration exceeds $400,000 and the taxpayer incorrectly indicates that the land contains at least one and not more than two single family residences.
• Double Payment of Tax on the Same Conveyance, e.g. when land transfer tax is paid on the registration of a caution or notice of agreement of purchase and sale, and then paid a second time on registration of the Transfer/Deed to the same taxpayer.
• Reduction in the Amount of the Value of the Consideration, e.g. the parties agree to a reduced value of the consideration (i.e. as a result of a future event), or under subsection 1(2) of the Act (Land Taken Under Statutory Authority).
• Payment of Tax Where No Tax is Payable, e.g. some transfers are exempt from tax by regulation (refer to a list of exemptions at the end of this bulletin).

First Time Purchasers of Newly Constructed Homes 

A refund of land transfer tax, up to a maximum of $2,000, is available to first time purchasers of newly constructed homes.  This refund is usually claimed at the time of registration.  If not, the refund may be claimed directly from the ministry.  For details, see Tax Bulletin LTT 1-2008 Land Transfer Tax Refunds For First-Time Homebuyers.

Transfer Has Not Taken Place 

A refund may be available where land transfer tax has been paid on the registration of a caution or notice of any kind (e.g. a notice of an agreement of purchase and sale), and the transfer has not taken place, has not been assigned, and is at an end.

The deletion of a notice or caution from title does not of itself provide evidence that the interest has not been assigned or the agreement is at an end.  As evidence, the purchaser must confirm that: no action for specific performance has been or will be launched, there are no further negotiations with the vendor to amend the agreement, and there has been no assignment of the purchaser's interest.

Application for Refunds

To apply for a refund of land transfer tax, you must submit a written request setting out the reasons for the refund.  There is no standard application form.  Documentation to support your refund application must be included.

Address for Mailing

Applications for the refund of land transfer tax must be forwarded to the Land and Resource Taxes section of the Ministry of Revenue at:

Land and Resource Taxes Section
Ministry of Revenue
33 King Street West
PO Box 625
Oshawa ON   L1H 8H9

Toll-free: 1 866 ONT-TAXS (1 866 668-8297)
Fax: 905 433-5770
Teletypewriter (TTY): 1 800 263-7776

Please note land registration fees are not refundable and should not be included in the amount of refund claimed.

Basic Documentation

Supporting Documents 

The following documents must accompany every refund application:

• Evidence that tax was paid, for electronic land registrations, a copy of the docket summary which relates to the transaction; for paper registrations, a photocopy of the document bearing the Land Registry Office's notation that the tax was paid.
• Copy of the agreement of purchase and sale, including all schedules, amendments and assignments of the agreement.
• Copy of the statement of adjustments.

Additional Documentation

Exemptions 

If tax has been paid on a transfer and an exemption applies, the documentation supporting the exemption must also be submitted.

Reduction in the Value of the Consideration 

If the refund is the result of a reduction in the value of the consideration, copies of all amending agreements must be provided along with the amended Land Transfer Tax Affidavit showing the actual value of the consideration.

Where the value of the consideration is reduced as a result of land being purchased to replace expropriated land, please refer to Tax Bulletin LTT 4-2000 Land Taken Under Statutory Authority.

First Time Purchasers of Newly Constructed Homes 

Where first time purchasers of newly constructed homes have not claimed a refund at registration, the following additional documents are required:

• a copy of the Ontario New Home Warranty Certificate, and
• an original sworn Land Transfer Tax Refund Affidavit For First Time Purchasers of Newly Constructed Homes.

For more information on this refund, please refer to Tax Bulletin LTT 1-2008 Land Transfer Tax Refunds For First-Time Homebuyers.

Transfer Has Not Taken Place 

Where the refund is with respect to a transfer that has not taken place, the following must also be submitted:

• a letter from the purchaser verifying that: 
  • the transaction is at an end,
  • the purchaser did not acquire an interest in the land,
  • the agreement has not been assigned, and
  • no action for specific performance has been or will be launched.
• a copy of the withdrawal of notice or caution, or any mutual release or agreement bringing the matter to an end.

Time Limits for Applying for a Refund

18 Months

An application for a refund by a first time purchaser of a newly constructed home must be received within 18 months from the date of conveyance or disposition.

Four Year Time Limit 

For most land transfer tax refunds, the application must be received by the ministry within four years from the date tax was paid.

No Time Limit 

There is no time limit to claim a refund for a transfer that has not taken place.

Points to Consider

Additional Information

The minister may require additional documents and information to verify refund eligibility.

Refunds Subject to Review and Audit 

All refund applications are subject to initial review and subsequent audit.  Where a person is not entitled to a refund, in whole or in part, a statement of disallowance will be issued and any additional tax will be assessed. 

Where a refund has been issued, and a subsequent audit determines that the person was not entitled to some or all of the refund, a notice of assessment may be issued to recover the refund.

The minister may assess or reassess any person within four years from the day the tax became payable.  However, there is no time limit on assessments where a person has:

• made any misrepresentation that is attributable to neglect, carelessness or willful default,
• committed any fraud, in supplying any information under the Act, in making any affidavit required by the Act, or in omitting to disclose any information, or
• failed to deliver any return required by the Act.

Regulatory Exemptions from Land Transfer Tax

The following is a summary of land transfer tax exemptions contained in the regulations to the Act.

Oil and Gas Pipe Lines Easements 

• Regulation 695, R.R.O. 1990.  More information can be found in Tax Bulletin LTT 1-2001 Guide to the Application of the Land Transfer Tax Act to Certain Transactions.

Transfers Between Spouses 

• Regulation 696, R.R.O. 1990.

Conveyances of Family Farms 

• Regulation 697, R.R.O 1990.  More information can be found in Tax Bulletin LTT 3 -2008 Exemption for Certain Transfers of Farmed Land.

Conveyances of Family Businesses 

• Regulation 697, R.R.O 1990.

Mineral Lands 

• Regulation 703, R.R.O. 1990.  More information can be found in Tax Bulletin LTT 3-2004 Land Transfer Tax Exemption For Certain Conveyances of Mineral Lands.

Employee to Employer 

• Ontario Regulation 71/91.

Toronto Islands Ontario

• Regulation 63/94.

Hospital Restructuring 

• Ontario Regulation 676/98.

Life Lease Interests 

• Ontario Regulation 88/04.  More information can be found in Tax Bulletin LTT 1-2004 Exemption for Certain Transfers of Life Lease Interests.

Additional Information

For further information, please refer to the Act and related regulations, or contact the:

Ministry of Revenue
Land and Resource Taxes Section
33 King Street West
PO Box 625
Oshawa ON  L1H 8H9

Toll-free: 1 866 ONT-TAXS (1 866 668-8297)
Fax: 905 433-5770
Teletypewriter (TTY): 1 800 263-7776 

This bulletin and various other English and French tax materials published by the Ministry of Revenue, may be obtained online at ontario.ca/revenue.

The Land Transfer Tax Act and Ontario's other statutes and regulations may be obtained online at ontario.ca/e-laws.