Land Transfer Tax Changes

LAND TRANSFER TAX CHANGES

Will go into effect Monday July 16, 2007

The information in this newsletter has been supplied and prepared by the Ministry of Revenue

The Nominal tab has been enhanced by both amending existing statements and adding new statements that present the user with a broader set of explanations as to why the declared value of consideration is nominal.

A new statement has also been added that facilitates transfers where the value of the consideration is nominal and where an encumbrance, that has been paid in full and that will be discharged, continues to be registered.

The Exemptions tab has been enhanced by revising the statements that must be completed in order to claim the family farm exemption set out in R.R.O., Reg. 697. These amendments were necessitated by recent amendments to Reg. 697 that extended the exemption to transfers by the personal representatives of estates to individuals.

The Explanations tab has been enhanced by adding a blank statement that allows the user to present any additional explanation for a selected statement.

New and amended statements for the Nominal tab

Over time it has become apparent that users are repeatedly entering common statements in the text box at Statement 9064 (Other) to explain why the value of the consideration for the transfer is nominal. New statements have been added which reflect the most common explanations that users have been entering at Statement 9064.

The new statements are created to reflect the most common statements users have entered in the Other box in the past. As with all explanatory statements, these are provided for the convenience of the users, enabling them to select the explanation that most closely fits their situation.

Availability of an explanatory statement does not necessarily mean the value of the consideration for the conveyance is, in fact, nominal. Users of the system need to verify that the value of the consideration for the conveyance is nominal, and should be aware that all registrations are subject to audit.

Statement 9056 (Transfer to a municipality pursuant to subdivision or development agreement, condominium approval or other municipal purpose: DESCRIBE): Previously, this statement only referred to a development agreement. It has been amended to take into account similar transfers pursuant to other types of agreements related to developments where the value of consideration is often nominal. NOTE: A description of the type of agreement must be provided in the text box.

Statement 9057 (Correcting deed to correct: DESCRIBE) — Previously, the statement referred to the correcting of land descriptions only. It has now been amended to allow the entry of text describing other reasons why a correcting deed is being registered for nominal consideration. NOTE: A description of the type of correction must be provided in the text box.

Statement 9146 (Inter-spousal transfer for natural love and affection) — THIS IS A NEW STATEMENT. This is a common explanation used to describe a transfer where the value of consideration is often nominal. NOTE: This statement is not a replacement for Statements 9085 to 9088 on the Exemptions tab re the spousal exemption granted by R.R.O.1990, Reg. 696. Statement 9146 can be used only if there is no consideration for the transfer. If there is any consideration for the transfer, the spousal exemption statements should be selected (if applicable).

Statement 9148 (Transfer of easement or right of way for no consideration) — THIS IS A NEW STATEMENT. This is a common explanation used to describe a transfer where the value of consideration is often nominal.

Statement 9150 (Determination of lease which has expired) — THIS IS A NEW STATEMENT. This is a common explanation used to describe a transfer where the value of consideration is often nominal. NOTE: This statement cannot be selected if the transfer involves the surrender of a taxable lease (ie, one that exceeds 50 years). See statement 9073 on Explanations Tab.

(ie, one Statement 9056 (Transfer to a municipality pursuant to subdivision or development agreement, condominium approval or other municipal purpose: DESCRIBE): Previously, this statement only referred to a development agreement. It has been amended to take into account similar transfers pursuant to other types of agreements related to developments where the value of  Consideration is often nominal. NOTE: A description of the type of agreement must be provided in the text box.

Statement 9152 (The land is subject to an encumbrance which has been paid in full, but for which a discharge has not yet been registered.) — THIS IS A NEW STATEMENT. In all cases where statements from the Nominal screen are selected, the user must also select a statement confirming whether or not the transferred lands are subject to an encumbrance. Such an encumbrance constitutes consideration in the form of an assumed liability and is subject to land transfer tax on its value. Statement 9152 has been added to cover transfers where a charge has been paid in full, but for which a discharge has not yet been registered.

New statement for the Explanations tab

Statement 9151 (Other remarks & explanations: TEXT) — THIS IS A NEW STATEMENT. It has been added to allow users to provide for any explanation which may be relevant to the transfer. NOTE: This statement may be selected with any other statement in Teraview.

New family farm exemption statements on the Exemptions tab

Statements 9123, 9078 9079, 9080 — THE FOLLOWING STATEMENTS REPLACE ALL OF THE PREVIOUS FAMILY FARM EXEMPTION STATEMENTS. Please note that, while the some of the Statement numbers for the previous statements have been re-used, the order and wording of the statements has been changed.

Statement 9123 (I/We have read and considered Regulation 697 etc. …) — This statement MUST ALWAYS be selected when claiming the family farm exemption. NOTE: When selecting this Statement, the user is required to identify the individual(s) who farmed the land prior to the conveyance, and the time period during which the individual(s) farmed the land.

Statement 9078 (This land is being conveyed for the principal purpose of enabling one or more individuals, etc.) — This statement must be selected if the transfer is to an individual or individuals.

Statement 9079 (This conveyance is from the personal representative(s) of the estate of a deceased individual, etc. ) — This statement must be selected if the transfer is from an estate of deceased individual to an individual or individuals. NOTE: If this statement is selected, then the user must also select Statement 9123. The user may also select Statement 9078, but this is not mandatory. Statement 9079 CANNOT be selected with Statement 9080.

Statement 9080 (This land is being conveyed for the principal purpose of enabling the transferee corporation to continue farming on the land, etc. ) — This statement must be selected if the transfer is to a family farm corporation. NOTE: When selecting this statement, the user must identify the individual(s) who will be directing the operations of the corporation. The user must also select Statement 9123. It CANNOT be selected with Statement 9078 and or Statement 9079.

For further information, please refer to our publication http://www.rev.gov.on.ca/english/guides/ltt/pdf/3251.pdf  A Guide for Real Estate Practitioners: Land Transfer Tax and the Electronic Registration of Conveyances of Land in Ontario.

For specific examples and other issues and common problems relating to land transfer tax, please refer to https://www.fin.gov.on.ca/en/guides/ltt/pdf/3250.pdf A Guide for Real Estate Practitioners: Land Transfer Tax and the Registration of Conveyances of Land in Ontario.

Both publications, together with all Land Transfer Tax bulletins, are available online at https://www.rev.gov.on.ca