Surface/Mineral Rights
- Is the conveyance of mineral rights subject to land transfer tax?
- If a conveyance includes both mineral and surface rights, does the conveyance require pre-approval of the ministry?
Is the conveyance of mineral rights subject to land transfer tax?
A conveyance of mineral rights is exempt from land transfer tax if it is:
- a conveyance only of the mineral rights to the land for consideration, and
- dependent wholly upon the quantity or value of the minerals that are removed from the land.
If the conveyance of mineral rights also includes a conveyance of surface rights, land transfer tax is payable on that part of the consideration that is reasonably attributable to the surface rights of the land.
If a conveyance includes both mineral and surface rights, does the conveyance require pre-approval of the ministry?
Yes. Ministry pre-approval is always required for conveyances of both surface and mineral rights. The ministry must confirm that the taxable consideration for surface rights has been reasonably divided up.
For further information refer to Ontario Tax Bulletin LTT 3-2004 – Land Transfer Tax Exemption For Certain Conveyances of Mineral Lands.
