Bulletin LTT 1-2001 Published: June 2001 Content last reviewed: September 2009 ISBN: 0-7794-1485-3 (Print), 0-7794-1486-1 (PDF)

This page clarifies the application of the Land Transfer Tax Act ("Act") on certain transfers of land. The information on this page rescinds and replaces Bulletin LTT-5 (November 1, 1974) and Bulletin LTT-7 (November 1, 1974).

1. Agreements of Purchase and Sale:

The definition of "convey" in section 1 of the Act includes "...agreeing to sell land in Ontario...or the registration of a caution or notice of any kind signifying the existence of an unregistered instrument or writing by which land is conveyed...".

As a result, an agreement of purchase and sale or any related notice or caution is a taxable conveyance when tendered for registration. The value of the consideration is the full amount of the consideration set out in the agreement. When the subsequent conveyance of the land to which the agreement relates is tendered for registration, no additional tax is payable where the Affidavit of Residence and Value of the Consideration states that the tax was paid when the agreement of purchase and sale or notice thereof was tendered for registration.

2. Options:

The definition of "convey" also includes the "giving of an option upon or with respect to any land". As a result, the notice of an option to purchase land or the assignment of an option is a taxable conveyance when tendered for registration. The value of the consideration is the amount of the consideration paid by the optionee to acquire the option, and not the option exercise price. Where there is an unregistered disposition of a beneficial interest in land as a result of an option, tax is applicable in accordance with section 3 of the Act. The consideration will be determined in the same manner described in the preceding paragraph. A return must be filed and the tax paid on the consideration paid by the optionee to acquire the option.

3. Easements:

A conveyance of land that is a grant of an easement or right of way is a taxable conveyance when tendered for registration and tax must be paid on the value of the consideration, if any.

The only exception to this is with respect to certain easements granted to oil or gas pipe line companies. Regulation 695, R.R.O.1990, defines a "pipe line company" and sets out that the following is exempt from tax:

"...any conveyance to or in trust for a pipe line company that conveys only an easement or right of way in, over, under or upon land, or that conveys only the right to acquire such an easement or right of way, and that is made for the purpose of enabling the pipe line company to construct and operate on the land described in the conveyance a pipe line for the transportation of oil, gas or other liquid and gaseous hydrocarbons and products thereof...".

This exemption may be claimed in paragraph 7 of the Affidavit of Residence and Value of the Consideration.

Where an easement is not registered on title, the provisions under section 3 for unregistered dispositions apply. In those cases the required return must be filed and the tax paid accordingly. Under the provisions of O. Reg. 70/91, the exemption available under Reg. 695 R.R.O. 1990 may also be claimed, if applicable, on unregistered dispositions.

4. Consideration Expressed in Foreign Currency, or in a Form Other Than Money

Where the consideration for a conveyance is expressed in foreign currency, or is in a form other than money (in kind), the value of the consideration shall be determined as of the date on which the agreement reflected in the conveyance was entered into in writing by the parties. The value of the consideration must be converted to Canadian currency.

Contact us

Documents required under the Act can be submitted by email, fax or mail, as per the contact information noted below.

If this page does not completely address your situation, refer to the Act and related regulations, visit our website at ontario.ca/finance or contact us by:

  • Email: LTTGeneral@Ontario.ca
  • Fax: 905-433-5770
  • Telephone toll free: 1-866-668-8297
  • Teletypewriter (TTY): 1-800-263-7776
  • Mail: Ministry of Finance Land Taxes Section 33 King Street West Oshawa ON L1H 8H9