How to keep you homeâ€™s purchase price secret
Clients often ask whether I can keep the price they are paying for their home off the title record. The main reason is for privacy. They don’t think it is anybody’s business but theirs.
You can do it if you pay the land transfer tax in advance. The tax is usually paid by your lawyer, but you can do it yourself. If that’s the case, you must include these documents with your request:
- A cover letter from the lawyer;
- A copy of the original agreement of purchase and sale;
- The draft deed to be registered on closing;
- A copy of the statement of adjustments;
- Three signed land transfer tax affidavits; and
- A certified cheque payable to the Ministry of Finance for the amount of land transfer tax owing.
If the house is in Toronto, you will also have to pay the municipal Land Transfer Tax. In order to pre-pay this tax, there is a similar process that must be followed but you have to send the material to a different location. In Toronto, take the same material noted above, together with the City of Toronto land transfer tax affidavits and send to the City of Toronto Revenue Services, Municipal Land Transfer Tax, North York Civic Centre, 5100 Yonge St., Lower Level, Toronto M2N 5V7.
The cheque is payable to the Treasurer, City of Toronto. A similar code will be given to enter on closing confirming that the tax has been paid in advance. If you are in a hurry, go in person with the documents and the certified cheque and you should be able to get the code that day.
If you are a first-time buyer, you are still eligible for the land transfer tax rebates and can deduct them from the amount payable for the tax. So for example, if this is your first home and it costs $300,000, the Ontario Land transfer Tax would be $2,975, but the rebate is a maximum of $2,000, so you would only pay $975.
If the property happens to be in Toronto, the Municipal Land Transfer Tax is $2,725, but since the maximum rebate is $3,725 in Toronto, no tax would be payable in the above example.
In all cases, what will show on your title after closing is either zero or $2 for the price paid. If you do want to take advantage of this, make sure that you speak to your lawyer in advance of closing so that the proper material can be prepared.
Mark Weisleder is a Toronto real estate lawyer. Contact him firstname.lastname@example.org or direct at (416) 702-2499 begin_of_the_skype_highlighting (416) 702-2499 FREE end_of_the_skype_highlighting.