A Guide for Real Estate Practitioners - Land Transfer Tax and the Electronic Registration of Conveyances of Land in Ontario

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This publication is intended as a guide only and is not a substitute for the provisions of the Land Transfer Tax Act and Regulations.

November 2004

For updates to publications, guides and forms, please refer to the Ministry of Revenue website at: ontario.ca/revenue

For further information about the Land Transfer Tax Act or this guide, please call the following numbers or write to the address noted below:

Toll-free: 1 866 ONT-TAXS (1 866 668-8297)
Facsimile 905 436-4507
Teletypewriter (TTY) 1 800 263-7776

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

Introduction
Land Transfer Tax
Deponents
Value of Consideration Greater Than $400,000
Consideration
Nominal
Explanations
Exemptions
Assessment Number
School Tax

Introduction

This guide has been prepared as a resource for legal and real estate professionals involved in the electronic registration of conveyances of land in Ontario. It is assumed that users of this handbook have a working knowledge of conveyancing and electronic registration. For specific examples and other issues and common problems relating to land transfer tax, please see A Guide for Real Estate Practitioners with respect to Land Transfer Tax and the Registration of Conveyances of Land in Ontario which is available on our website.

This publication contains general information and is provided for convenience and guidance for the land transfer tax portion of Teraview only. It is not a substitute for the provisions of the Land Transfer Tax Act (Act) or Regulations. Should there be a discrepancy between this document, the Act and its regulations, the provisions of the Act and regulations apply.

For updates to publications, guides and forms, please refer to the Ministry of Revenue website at:
ontario.ca/revenue

For further information about the Act or this guide, taxpayers may call the following numbers or write to the address noted below:

Toll-free: 1 866 ONT-TAXS (1 866 668-8297)
Facsimile 905 436-4507
Tax Fax 1 877 4-TAX-FAX
Teletypewriter (TTY) 1 800 263-7776

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

Land Transfer Tax

The TAX option in the menu below launches the Land Transfer Tax functions enabling the user to select the tabs required to complete the Land Transfer Tax Statements.

Tax option displayed in menu

When the TAX function is selected the Land Transfer Tax window opens and the following tabs are presented:

Land Transfer Tax window

Failure to complete a mandatory tab or field will generate an error message and prevent successful completion of the electronic registration.

In some cases supplementary evidence may be required for presentation to the registry office before certification of title can take place.

Deponents

Deponents section

Completion of this section is mandatory for all electronic conveyances.

Deponents are the individuals who make statements and declare in what capacity they are completing the statements.

If more than one deponent, and each deponent is not in the same capacity, more than one deponent tab must be completed. To add a deponent, click on the + sign on the toolbar. To delete a deponent, click on the - sign on the toolbar.
This section may be completed by an agent authorized in writing to act on behalf of a transferee(s), or by a solicitor.
A corporation cannot be a deponent. If a corporation is a transferee, either paragraph (d) or (e) must be selected.
Where transferees are spouses or same-sex partners, either spouse or same-sex partner may complete paragraph (f) or (g) on behalf of both of them.
If any of paragraphs (d), (e), (f) or (g) are selected, a paragraph reference must be made and the individual or corporation being represented must be inserted by clicking the grey box to the right of the text box and selecting the appropriate party.
The transferor may complete the statements where no tax is payable under the Land Transfer Tax Act and the transferor has sufficient information to enable the transferor to make the statements. The name of the transferor may be inserted manually or by clicking the grey box to the right of the text box and selecting the transferor(s) from the drop down menu, as illustrated below. No further statement should be selected on the Deponent tab, however statement 9120 or 9121 must be selected from the Explanations tab.
Note: The Teraview system does not allow for the transferor(s) to make statements if they consist of a combination of a person and a company.

Value of Consideration > $400,000

This section must be completed ONLY where the consideration is greater than $400,000.00. A higher rate of tax applies to any consideration over $400,000.00 where the lands contain at least one and not more than two single family residences.

Statement 9031 MUST be made together with one of 9032, 9033 or 9038.

Note: Subsection 2.1(2) of the Act allows for an apportionment of the consideration where the total consideration exceeds $400,000 and part of the land being conveyed has a use other than just residential (please note that "vacant" or "no use" is not considered to be another use). This results in a lower tax payable than would normally be calculated had the apportionment not been claimed.

If the value of consideration can be apportioned, statements 9031 and 9038 must be selected and completed. When 9038 is selected you must enter the total consideration attributed to the single family residence only in "AMOUNT" and the use of the remainder of the lands must be described in "TEXT". The system will calculate the appropriate amount of land transfer tax based on the consideration entered on both the consideration tab and the amount entered in statement 9038 for the single family residence.

Note: When completing the "AMOUNT", use only numerical values and do not use any dollar signs, commas or decimal points.

Consideration

By definition, consideration includes the gross sale price paid or to be paid by or on behalf of the transferee, the value expressed in money of any liability assumed by or on behalf of the transferee, and the value of any benefit conferred, either directly or indirectly by the transferee, as part of the arrangement relating to the transfer. The consideration must be allocated to (a) through (f) on the consideration screen.

1 (c) Property transferred in exchange – Statement 9021

Where the transfer is pursuant to an exchange of lands, the value of the property involved in the exchange must be entered in paragraph (c). After entering an amount in paragraph (c), go to the "Explanations Tab," select statement 9021, and enter a brief legal description of the lands transferred in exchange.

1 (d) Fair Market Value of the land(s) – Statements 9022 and 9011, 9012, 9013, 9014 or 9015

In certain circumstances, the Land Transfer Tax Act deems the value of consideration to be the fair market value of the land. The fair market value of the land must be entered in paragraph (d). After entering an amount in paragraph (d), go to the "Explanations Tab," select statement 9022, and one of 9011, 9012, 9013, 9014 or 9015.

The following are situations where the value of consideration is deemed to be equal to the fair market value of the land as of the date of registration:

Statement 9011 – Any transfer to a corporation where shares of the transferee corporation form all or part of the consideration.
Statement 9012 – Any transfer from a corporation where the transferee is a shareholder of the transferor.
Statement 9013 – Any transfer of a leasehold interest where the lease can exceed 50 years.
Statement 9014 – In the case of a final order of foreclosure, the transferee is given the option of setting out as the consideration the lessor of (i) the amounts outstanding on the mortgage being foreclosed together with all prior mortgages and any subsequent mortgages held by the transferee OR (ii) the fair market value of the land as of the date of registration. If the latter is used, then this value should be entered in paragraph (d).
Statement 9015 – Other. This is a text field that allows the user to provide other explanations such as a transfer to a mortgagee from a mortgagor as a result of a default on the mortgage and the transfer is being made in lieu of a foreclosure.

1 (f) Other valuable consideration subject to land transfer tax – Statement 9023

Where an amount is entered in paragraph (f), you must go to the "Explanations Tab" and select statement 9023 and enter a description of the consideration.

Where a partial exemption is being claimed, the non-exempt portion of the consideration should be entered here and then you must go to the "Explanations Tab" and select statement 9023 and enter an explanation for the partial exemption.

1 (g) VALUE of land, building, fixtures & goodwill subject to Land Transfer Tax–Statement 9024

The Land Transfer Tax payable will be calculated on the total consideration automatically inserted in paragraph (g). The amount of tax payable will appear on the screen and will be adjusted according to any subsequent claims for exemption.

1 (h) VALUE OF ALL CHATTELS – items of tangible personal property e.g. furniture

Retail Sales Tax will also be calculated on any consideration shown in paragraph (h).

1 (i) Other considerations for transaction not included in (g) or (h) – Statement 9024

Where an amount is entered in paragraph (i), you must go to the "Explanations Tab" and select statement 9024 and enter a description of the other consideration. Amounts entered in paragraph (i) must not be taxable under the Land Transfer Tax Act and may include amounts paid for chattels, but not subject to Retail Sales Tax.

Nominal

Statements may be selected here ONLY in situations where there is NO CONSIDERATION OF ANY KIND OR THE VALUE OF CONSIDERATION IS LESS THAN $200 for the conveyance. This section must not be completed if an exemption is claimed.

Statement 9049 must be chosen together with one of 9050, 9051, 9052, 9053, 9054, 9055, 9056, 9057, 9058, 9066, 9060, 9061, 9063 or 9064. If 9064 is selected then "TEXT" must be entered.

If 9051, 9052 or 9053 are selected, title will not be certified until the supplementary trust affidavit is submitted to the Land Registry Office.

If 9058 or 9060 are selected, then either statement 9047 or 9048 must be made.

Note: If 9047 is chosen, then the amount of the encumbrance must be entered on line 1(b)(I) of the "Consideration Tab" section and all previously selected statements should be removed from the Nominal Tab. The tax will be calculated accordingly, as there is no exemption available on a transfer that is a gift or a donation to a charity where there is an existing encumbrance on the land.

Explanations

Consideration – Explanation required

In certain circumstances, explanations are required where a figure is entered in "c", "d", "f" and "i" on the "Consideration" tab. Please see the "Consideration" section of this guide for details.

The "Explanation" tab should also be used when a partial exemption is being claimed. Please see the "Consideration" section of this guide for details.

Land Transfer Tax Statements by the Transferor

Statement 9120 Individual(s) – This statement only applies where the transferor(s) is an individual(s) who has sufficient information to complete these statements.
Statement 9121 Corporation – This statement only applies where the transferor is a corporation. The person making the statements must be an officer of the corporation authorized to act for the transferor and who has sufficient information to complete these statements.

Note: The transferor can only make the statements if no tax is payable.

Regulation 700, RRO 1990

If a reduction in the consideration is being made pursuant to Regulation 700, RRO 1990, then statement 9073 must be completed.

Refund for a First Time Homebuyer of a Newly Constructed Home

Select statement 9027 or 9028, depending on the date that the agreement of purchase and sale was entered into
Double click on the "ALL" OR FRACTION (N/D) to open a new window. Delete existing text and input ALL, fraction or percentage of parties who are First Time Homebuyers.
Ensure the land transfer tax has been reduced by the refund amount before registering.
Forward the Land Transfer Tax Refund Affidavit to the Land Registry Office.

Exemptions

This section is to be completed only where consideration is paid but an exemption is claimed and therefore no tax is payable.

Transfer of an Easement to Oil or Gas Pipeline Company – Statement 9071 – This conveyance qualifies for an exemption from tax under Regulation 695 RRO 1990 for certain transfers of easements to an oil or gas pipeline company.
Transfer between Spouse or Same-sex Partner – Statement 9085 must be chosen together with one of 9086, 9087 or 9088 – These statements only apply to inter-spousal transfers that qualify for exemption under regulation 696 RRO 1990 and should not be used if other statements have been selected from the Nominal tab.

Notice of Purchaser's Lien for Default – Statement 9074 – This conveyance qualifies for an exemption from tax under Regulation 701 RRO 1990 for certain transfers involving a Notice of Purchaser's Lien for Default.
Taxation of Mineral Rights – Statement 9075 – This statement can be selected if the conveyance is of minerals rights only or a transfer of a surface rights option. Any conveyance which contains both mineral rights and surface rights must be pre-approved by the Ministry prior to registration. Such conveyances would include any lease which can exceed 50 years and contains surface rights as well as the exercise of a surface rights option.
Transfer to the Crown or Crown Agency – Statement 9076 – This conveyance qualifies for an exemption from tax under subsection 2(8) of the Land Transfer Tax Act.
Ministry of Revenue Endorsement – Statement 9089 & 9090 – These statements can only be selected after the Ministry has signified its approval prior to registration. The “Evidence to be submitted” includes the draft document bearing the Ministry's endorsement and must be presented to the Land Registry Office before title can be certified. When selecting statement 9089, the payment receipt number issued by the Ministry will be entered in the “NUMBER” text box. These statements should not be used as a means of avoiding a second payment of tax where tax was previously paid at the land registry office on registration of a notice, caution or other conveyance.
Tax Previously Paid - Statement 9126 - Where a transfer document is being registered and tax was previously paid, the “document type” should be described as either a notice or caution and the instrument number attached to the notice or caution should be entered. Note: the value of consideration must be entered on the consideration screen.
Acquisition and Reversion of a life lease interest - Statements 9124 and 9125 - Where a document is being registered that conveys a life lease interest to a purchaser or the reversion of a life lease interest back to the owner of the life lease development, select whichever statement is applicable.
Family Farm Exemption - Statement 9123 - This exemption is available for transfers from individuals to other individuals who are members of the same family to continue farming on the lands.
Family Farm Exemption – Statements 9078, 9079, 9080, 9081, 9082 and 9084 – This conveyance qualifies for an exemption from tax under Regulation 697 RRO 1990 for the Family Farm Exemption. Statements 9079, 9080 and 9081 require additional information to be entered in the applicable text boxes.

Note: The exemption for a conveyance to a family business corporation cannot be claimed electronically. The proper documentation to claim this exemption must be submitted directly to the Ministry of Revenue and the applicable endorsement obtained.
Hospital Restructuring – Statement 9099 – This conveyance qualifies for an exemption from tax under Regulation 676 RRO 1998 for certain hospital restructuring.