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Land transfer taxes hound first-time buyers in hottest markets

A group of people standing in a hallway in a new home.

In Canada’s hottest housing markets, first-time buyers are forced to deal with both elevated home prices and the significant impact of land transfer taxes, according to a new analysis by real estate information portal Zoocasa.

As the tax is a non-mortgagable amount that must be paid in cash upon the closing of a deal, this leads to “buyers in the most expensive and heavily-taxed housing markets [saving] for years longer to have that cash in hand, compared to more affordable markets with a moderate fee structure,” Zoocasa noted.

The analysis looked at average home prices (as of May 2018), land transfer tax structures, and applicable home buyer rebates to determine which major metropolitan markets impose the greatest tax burdens upon first-time buyers.

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The Canadian cities with the highest land transfer taxes for first-time buyers are:

  • Rank 1 (Highest): Vancouver, BC – $20,076 (average home price of $1,103,803)
  • Rank 2: Toronto, ON – $16,687 (average home price of $805,320)
  • Rank 3: Victoria, BC – $12,270 (average home price of $713,485)
  • Rank 4: Abbotsford, BC – $8,780 (average home price of $538,999)
  • Rank 5: Kelowna, BC – $8,659 (average home price of $532,972)

Fortunately, first-time buyers can find respite from land transfer taxes in these markets:

  • Windsor-Essex, ON – $0 (average home price of $303,183)
  • London & St. Thomas, ON – $0 (average home price of $366,096)
  • Edmonton, AB – $239 (average home price of $386,750)
  • Calgary, AB – $269 (average home price of $471,030)
  • Niagara Region, ON – $629 (average home price of $407,693)

 

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About the Author

Ephraim is currently a journalist at Mortgage Broker News, Real Estate Professional and Canadian Real Estate Wealth. Ephraim is a highly accomplished news reporter whose work has been published across North America and the Asia Pacific region. Before joining Key Media, Ephraim spent eight years working as a journalist with Reuters TV. His areas of expertise include real estate, mortgage, and finance. LinkedIn | Email  

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