# Calculation examples for the property transfer tax

Publication date: February 25, 2021

Below are some examples on how property transfer tax applies for some scenarios:

• Calculation examples based on the tax rates

• Calculation examples based on exemptions

## Tax rate calculation examples

### General property transfer tax rate

Scenario 1: Full ownership transfers

Person A and Person B sell their home to Person C and Person D. The fair market value of the property is \$650,000 and legal ownership in the entire (100%) property transfers.

Calculate the tax payable:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$9,000 (\$650,000 - \$200,000 = \$450,000 X 2% = \$9,000)

The total tax payable is \$11,000 (\$2,000 + \$9,000 = \$11,000).

Note: If the property value exceeded \$2,000,000, then the 3% general property transfer tax rate would apply for the fair market value over and above \$2,000,000.

Scenario 2: Partial ownership transfers

Person A is the sole owner of a property and sells half of their interest to Person B. The fair market value of the property is \$500,000 and a 50% interest will transfer.

First, determine the taxable transaction’s fair market value:

• 50% X \$500,000 = \$250,000

Then calculate the tax payable:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$1,000 (\$250,000 - \$200,000 = \$50,000 X 2% = \$1,000)

The total tax payable is \$3,000 (\$2,000 + \$1,000 = \$3,000).

### Further 2% tax on residential property over \$3,000,000

See  further 2% tax on residential property over \$3,000,000 for more information.

Scenario 1: Full ownership transfers and the property is entirely residential

Person A sells their home to Person B. The fair market value of the property is \$4,500,000 and legal ownership in the entire (100%) property transfers. The property is entirely residential.

Calculate the tax payable:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$36,000 (\$2,000,000 - \$200,000 = \$1,800,000 X 2% = \$36,000)
• 3% of the fair market value greater than \$2,000,000= \$75,000 (\$4,500,000 - \$2,000,000 = \$2,500,000 X 3% = \$75,000)
• Further 2% on residential property over \$3,000,000 = \$30,000 (\$4,500,000 - \$3,000,000 = \$1,500,000 X 2% = \$30,000)

Total tax payable is \$143,000 (\$2,000 + \$36,000 + \$75,000 + \$30,000 = \$143,000).

Scenario 2: Partial ownership transfers, the property is residential and commercial (mixed class)

Person A sells a 50% interest in their home to Person B. The fair market value of the property is \$10,000,000 and partial ownership in the property transfers. The property has:

• Residential land and improvements with a fair market value of \$7,000,000
• Commercial land and improvements with a fair market value of \$3,000,000

First, determine the taxable transaction’s fair market value:

• 50% X \$10,000,000 = \$5,000,000

Then calculate the general property transfer tax:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$36,000 (\$2,000,000 - \$200,000 = \$1,800,000 X 2% = \$36,000)
• 3% of the fair market value greater than \$2,000,000 = \$90,000 (\$5,000,000 - \$2,000,000 = \$3,000,000 X 3% = \$90,000)

The general property transfer tax payable is \$128,000 (\$2,000 + \$36,000 + \$90,000 = \$128,000).

Second, to calculate the 2% tax on residential property value over \$3,000,000, determine the taxable amount of residential property for the transaction:

• (Total percentage of ownership transferred x Fair market value of the residential property) - \$3,000,000
• (50% X \$7,000,000) - \$3,000,000 = \$500,000

The taxable residential property value is \$500,000. From this, calculate the 2% tax on residential property value over \$3,000,000:

• 2% on \$500,000 = \$10,000

Therefore, the total tax payable is \$138,000 (\$128,000 + \$10,000).

### Additional property transfer tax at 20%

Scenario 1: Full ownership transfers to foreign entities and property value exceeds \$3M

Person A and Person B sell their home to Person C and Person D. The fair market value of the property is \$3,400,000 and legal ownership in the entire (100%) property transfers. Person C and Person D are foreign entities and the property is entirely residential within a specified area.

Calculate the tax payable:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$36,000 (\$2,000,000 - \$200,000 = \$1,800,000 X 2% = \$36,000)
• 3% of the fair market value greater than \$2,000,000 = \$42,000 (\$3,400,000 - \$2,000,000 = \$1,400,000 X 3% = \$42,000)
• Further 2% on residential property over \$3,000,000 = \$8,000 (\$3,400,000 - \$3,000,000 = \$400,000 X 2% = \$8,000)
• 20% for additional property transfer tax on taxable amount = \$680,000 (\$3,400,000 X 20% = \$680,000)

The total tax payable is \$768,000 (\$2,000 + \$36,000 + \$42,000 + \$8,000 + 680,000 = \$768,000).

Note:  If the property value did not exceed \$3,000,000, then the 2% tax on residential property over that value would not apply.

Scenario 2: Full ownership transfers to two individuals, one of the owners is a foreign entity

Person A and Person B sell their home to Person C and Person D. The fair market value of the property is \$1,000,000 and legal ownership in the entire (100%) property transfers. Person C is a foreign entity, and the property is entirely residential within a specified area. Person D is a Canadian citizen.

First, calculate the general property transfer tax:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$16,000 (\$1,000,000 - \$200,000 = \$800,000 X 2% = \$16,000)

The total general property transfer tax payable is \$18,000 (\$2,000 + \$16,000).

Then, determine Person C’s proportionate share in the taxable fair market value of the residential property:

• 50% X \$1,000,000 = \$500,000

Person C’s proportionate share in the fair market value of the residential property is \$500,000. From this, apply the 20% additional property transfer tax rate:

• 20% on \$500,000 = \$100,000

Therefore, the total tax payable is \$118,000 (\$18,000 + \$100,000).

## Exemption calculation examples

For more information on whether you qualify for an exemption, see property transfer tax exemptions.

### Principal residence exemptions

Scenario 1: Full ownership transfer of property size less than 0.5 hectares and the Related Individual – Principal Residence exemption claimed

Person A transfers ownership of their property entirely (100%) to Person B who is a related individual. All requirements of the Related Individual – Principal Residence exemption are met for a full exemption and the fair market value of the property is \$500,000.

Calculate the exempt tax amount:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$6,000 (\$500,000 - \$200,000 = \$300,000 X 2% = \$6,000)

The exempt amount is \$8,000 (\$2,000 + \$6,000 = \$8,000).

Scenario 2: Property size less than 0.5 hectares, Related Individual – Principal Residence exemption claimed and not all transferees are exempt

Person A transfers ownership of their property entirely (100%) to Person B and Person C. Person B is a related individual to Person A and will acquire 70%, but Person C is not a related individual and will acquire 30%. Person B meets all the requirements of the Related Individual – Principal Residence exemption. The fair market value of the property is \$500,000.

First, determine the taxable amount based on the interest transferring:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$6,000 (\$500,000 - \$200,000 = \$300,000 X 2% = \$6,000)

The taxable amount is \$8,000 (\$2,000 + \$6,000 = \$8,000).

Then, determine the exempt value and the amount that must be paid:

• \$8,000 X 70% = \$5,600 (exempt for Person B)
• \$8,000 X 30% = \$2,400 (tax payable for Person C)

Therefore, the tax payable is \$2,400 and the exempt amount is \$5,600.

Scenario 3: Full ownership transfer of property size greater than 0.5 hectares and Related Individual – Principal Residence exemption claimed

Person A transfer’s ownership of their property entirely to Person B who is a related individual. All the requirements of the Related Individual – Principal Residence exemption are met by Person B except that the property exceeds 0.5 hectares and is 2.02 hectares. In this case, a partial exemption would apply.

The total fair market value of the property is \$600,000, with residential improvements worth \$200,000 and the rest of the value in the land. The property is entirely residential and full legal ownership is being transferred.

First, determine the tax that would have otherwise been payable on the taxable transactions fair market value:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$8,000 (600,000 - \$200,000 = \$400,000 X 2% = \$8,000)

The taxable amount is \$10,000 (\$2,000 + \$8,000 = \$10,000).

Then, determine the adjusted value and the tax that would be payable on the adjusted value:

• Adjusted value = Taxable transaction’s fair market value - Fair market value of the interest in residential improvements – (Fair market value of the land transferred x [0.5 hectares/ total area of the parcel])
• \$600,000 – \$200,000 – (\$400,000 X [0.5/2.02]) = \$300,990.10

Next, calculate the tax on the adjusted value:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$2,019.80 (\$300,990.10 - \$200,000 = \$100,990.10 X 2% = \$2,019.80)

The tax on the adjusted value is \$4,019.80 (\$2,000 + \$2,019.80).

Lastly, determine the exempt amount:

• Exempt amount = Transferee’s interest in the fair market value x (Tax otherwise payable on the fair market value - Tax on the adjusted amount)
• 100% X (\$10,000 - \$4,019.80) = \$5,980.20

Therefore, the exempt amount is \$5,980.20 and the tax payable is \$4,019.80.

Scenario 4: Partial ownership transfer of property size greater than 0.5 hectares and Related Individual – Principal Residence exemption claimed

Person A transfers 50% interest in their property to Person B who is a related individual. All the requirements of the Related Individual – Principal Residence exemption are met, except the property is 2.02 hectares, which exceeds 0.5 hectares. In this case, a partial exemption would apply.

The total fair market value of the property is \$800,000, with improvements worth \$400,000 and the rest of the value in the land. The property is entirely residential.

First, determine the tax payable if the property is not exempt. To do this, determine the taxable transaction’s fair market value:

• \$800,000 X 50% = \$400,000

The taxable transactions fair market value is \$400,000.

Then calculate the tax that would be payable on this had no exemption applied:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$4,000 (\$400,000 - \$200,000 = \$200,000 X 2% = \$4,000)

The tax payable is \$6,000 (\$2,000 + \$4,000 = \$6,000).

Second, determine the adjusted value and the tax that would be payable on that adjusted value:

• Adjusted value = taxable transactions fair market value – (percentage interest in residential improvements x fair market value of the residential improvements) – (fair market value of the land transferred x [0.5 hectares/ total area of the parcel])
• \$400,000 – (50% X \$400,000) – (\$200,000 X [0.5/2.02]) = \$150,495.05

The tax payable on the adjusted valued is:

• 1% of the fair market value up to and including \$200,000 = \$1,504.95 (\$150,495.05 X .01 = \$1,504.95)

Lastly, calculate the exempt amount:

• Exempt amount = Tax otherwise payable - Tax on the adjusted value
• \$6,000 - \$1,504.95 = \$4,495.05

Therefore, the tax payable on this transaction is \$1,504.95 and the exempt amount is \$4,495.05.

### Single lot subdivision exemption

Scenario: Single lot subdivided into three smaller lots

Person A, Person B and Person C each have 33.33% legal ownership in a single lot. They would like to subdivide the lot three ways, so each has their own lot. Person A will acquire lot A, Person B will acquire lot B and Person C will acquire Lot C through the subdivision.

The fair market value of the original lot is \$500,000. Following the subdivision, lot A’s value is \$250,000, lot B’s value is \$200,000, and lot C’s value is \$300,000.

To calculate each owner’s share in the subdivided lots, determine the total fair market value of the subdivided lots:

• \$250,000 (lot A) + \$200,000 (lot B) + \$300,000 (lot C) = \$750,000 (total fair market value of subdivided lots)

Then, determine each owner’s share in the subdivided lots:

• Lot A = \$250,000 / \$750,000 = 33.33% (Person A)
• Lot B = \$200,000 / \$750,000 = 26.67% (Person B)
• Lot C = \$300,000 / \$750,000 = 40% (Person C)

If the share in the fair market value of the smaller parcels per owner does not exceed what they had before the transfer, than they are exempt. If not, then tax is payable on the increase of their proportionate share in the fair market value of the subdivided lots. In this case, Person A and Person B’s share in the fair market did not increase. Person C’s share increased by 6.67% (40% - 33.33% = 6.67%), therefore tax is payable on Person C’s increase in the share of fair market value of the subdivided lots.

In this case, determine the fair market value subject to tax:

• \$750,000 X 6.67% = \$50,250

Then calculate the tax payable:

• 1% of the fair market value up to and including \$200,000 = \$502.50 (\$50,250 X 1% = \$502.50)

Therefore, the tax payable is \$502.50 for Person C’s gain in the share of the fair market value from the original to subdivided lots.

### First time home buyers' exemption

Scenario 1: Full ownership transfers and fair market value does not exceed \$500,000

Person A sells their home to Person B. All requirements of the First Time Home Buyers' Exemption are met for a full exemption. The fair market value of the property is \$475,000 and 100% of the property ownership transfers.

Calculate the exempt amount:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$5,500 (\$475,000 - \$200,000 = \$275,000 X 2% = \$5,500)

The total exempt tax amount is \$7,500 (\$2,000 + \$5,500).

Scenario 2: Full ownership transfers, fair market value is between \$500,000 and \$835,000, and not all transferees qualify

Person A sells their home to Person B and C. Person B receives a 50% interest in the property and meets the requirements for the exemption. Person C receives a 50% interest but is not eligible for the exemption. The fair market value of the Property is \$700,000 and the property does not exceed 0.5 hectares.

First, calculate the tax that would otherwise be payable as though not exempt:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$10,000 (\$700,000 - \$200,000 = \$500,000 X 2% = \$10,000)

The tax payable if not exempt is \$12,000.

Then, determine the exemption amount for the first time home buyer:

\$8,000 maximum exemption amount x 50% = 4,000

You can then determine the tax payable based on the following calculation:

\$12,000 total tax payable minus \$4,000 exemption amount = \$8,000

The exempt amount is \$4,000 and the tax payable after exemption is \$8,000.

Note: When a property exceeds \$835,000 but is less than \$860,000, only a partial exemption will apply. See First Time Home Buyers' Exemption Amounts for more details.

Scenario 1: Full ownership transfers and fair market value does not exceed \$500,000

Person A sells their home to Person B. All requirements of the First Time Home Buyers' Exemption are met for a full exemption. The fair market value of the property is \$475,000 and 100% of the property ownership transfers.

Calculate the exempt amount:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$5,500 (\$475,000 - \$200,000 = \$275,000 X 2% = \$5,500)

The total exempt tax amount is \$7,500 (\$2,000 + \$5,500).

Scenario 2: Full ownership transfers, fair market value is between \$500,000 and \$835,000, and not all transferees qualify

Person A sells their home to Person B and C. Person B receives a 50% interest in the property and meets the requirements for the exemption. Person C receives a 50% interest but is not eligible for the exemption. The fair market value of the Property is \$700,000 and the property does not exceed 0.5 hectares.

First, calculate the tax that would otherwise be payable as though not exempt:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$10,000 (\$700,000 - \$200,000 = \$500,000 X 2% = \$10,000)

The tax payable if not exempt is \$12,000.

Then, determine the exemption amount for the first time home buyer:

\$8,000 maximum exemption amount x 50% = 4,000

You can then determine the tax payable based on the following calculation:

\$12,000 total tax payable minus \$4,000 exemption amount = \$8,000

The exempt amount is \$4,000 and the tax payable after exemption is \$8,000.

Note: When a property exceeds \$835,000 but is less than \$860,000, only a partial exemption will apply. See First Time Home Buyers' Exemption Amounts for more details.

Scenario 3: Full ownership transfers, fair market value is above \$835,000 and less than \$860,000, and not all transferees qualify

Person A sells their home to Person B and C. Person B receives a 50% interest in the property and meets the requirements for the exemption. Person C receives a 50% interest but is not eligible for the exemption. The fair market value of the Property is \$850,000 and the property does not exceed 0.5 hectares.

First, calculate the tax that would otherwise be payable as though not exempt:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$13,000 (\$850,000 - \$200,000 = \$650,000 X 2% = \$13,000)

The tax payable if not exempt is \$15,000.

Then, determine the exemption amount for the first time home buyer:

• \$8,000 maximum exemption amount X 50% = \$4,000

As the fair market value of the property is above \$835,000 and less than \$860,000, you can then determine the exempt amount based on the following calculation:

• Amount of applicable exemption X ([\$860,000 – Fair market value of property]/25,000)
• \$4,000 X ([\$860,000 - \$850,000] / \$25,000) = \$1,600

To determine the tax payable, subtract the exempt amount from the total tax as though not exempt:

• \$15,000 – \$1,600 = \$13,400

The exempt amount is \$1,600 and the tax payable after exemption is \$13,400.

### Newly built home exemption

scenario 1: Full ownership transfers and fair market value does not exceed \$1,100,000.

Person A and Person B buy a brand-new home that has never been used as a dwelling and all requirements of the Newly Built Home Exemption are met for a full exemption. The fair market value of the property is \$1,100,000 and 100% of the property ownership transfers.

Calculate the exempt amount:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$18,000 (\$1,100,000 - \$200,000 = \$900,000 X 2% = \$18,000)

The total exempt tax amount is \$20,000 (\$2,000 + \$18,000).

Scenario 2: Full Ownership Transfers and property exceeds 0.5 hectares

Person A buys a brand-new home that has never been used as a dwelling. They meet all requirements of the Newly Built Home Exemption except that the property is 1 hectare, exceeding the 0.5-hectare requirement. The fair market value of the entire property is \$1,000,000, which includes a residential improvement worth \$250,000, and the remainder of the value in the land.

First, calculate the tax as though not exempt:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$16,000 (\$1,000,000 - \$200,000 = \$800,000 X 2% = \$16,000)

The tax payable as though not exempt is \$18,000 (\$16,000 + \$2,000).

Then, determine the fair market value of the portion of property inclusive of the residential improvement used as the principle residence and 0.5 hectares of the land:

• Value of the residential improvement + (Total fair market value of land X [0.5/Total size of property])
• \$250,000 + (\$750,000 X [0.5/1]) = \$625,000

The value of \$625,000 is that portion of the total fair market value that is eligible for exemption. You can then use this value to determine the exempt tax amount by the following formula:

• (Portion of value eligible for exemption / Total fair market value of property) X Tax as though not exempt
• (\$625,000/\$1,000,000) X \$18,000 = \$11,250

The exempt tax amount is \$11,250. To determine the taxable payable, subtract the exempt amount from the tax as though not exempt:

• \$18,000 - \$11,250 = \$6,750

Accordingly, the tax payable \$6,750 and the exempt amount is \$11,250.

Note: When a property value exceeds \$1,100,000 but is less than \$1,150,000, only a partial exemption will apply. See Newly Built Home Exemption Amounts for more details.

### Lease term exceeding 30 years

Scenario 1: New lease

A lessee will register a new lease at the Land Title Office on the commencement date with a term of 40 years including all rights of renewal (not prepaid). The lease covers the entire property with a fair market value of \$600,000. As the term is more than 30 years but not more than 40 years, the lease is taxable on 80% of the fair market value as per Table 1 Column 2 of the Regulations.

First, calculate the taxable fair market value:

• \$600,000 X 80% = \$480,000

Then, calculate the tax payable:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$5,600 (\$480,000 - \$200,000 = \$280,000 X 2% = \$5,600)

The total tax payable is \$7,600 (\$2,000 + \$5,600 = \$7,600).

Note: Lease terms that don’t exceed 30 years qualify for an exemption.

Scenario 2: Lease modification

A lessee has a pre-existing lease with a total term of 30 years, including all rights of renewal (not prepaid) that was registered at the Land Title Office. No property transfer tax was paid on the pre-existing lease as its term did not exceed 30 years at the time of registration. This lease will expire shortly though, and the lessee would like to register a lease modification to occupy the property for an additional 15 years including all rights of renewal. As the total term of the lease is 45 years, now exceeding 30 years for an exemption, the modification is taxable.

The lease covers the entire property with a fair market value of \$600,000. As the term of the modification is more than 10 years but not more than 20 years, the modification is taxable on 60% of the fair market value as per Table 1 Column 2 of the Regulations.

First, calculate the taxable fair market value:

• \$600,000 X 60% = \$360,000

Then, calculate the tax payable:

• 1% of the fair market value up to and including \$200,000 = \$2,000
• 2% of the fair market value greater than \$200,000 and up to and including \$2,000,000 = \$3,200 (\$360,000 - \$200,000 = \$160,000 X 2% = \$3,200)

The total tax payable is \$5,200 (\$2,000 + \$3,200 = \$5,200).