The Land Transfer Tax Explained
And keep in mind that the laws change over time and the specific tax rate imposed on you may be different than what's listed below. That being said, the notes below should give you some idea about what to expect:
1. In Canada this is a progressive tax, meaning the higher the property value, the higher the rate. It can range as low as 0.5% for a property valued under $55,000 all the way to 2% for properties valued at $2,000,000 or over. The specific rate varies from province to province, and in some cities such as Toronto there is an additional municipal tax added as well, which practically doubles the transfer taxes you pay. In some locales, if you are not a resident of the province, you may even have to pay an additional non-resident speculation tax, which can get as high as 15%. The one bit of good news is: There are some circumstances which allow you to avoid this tax. For instance, in BC, the land transfer tax is 1% on the first $200,000 and 2% on the remainder. But if you are a first time home buyer (you've never owned property anywhere on the planet), and it's your primary residence (you live there throughout the year), and it's fair market value is no more than $475,000, you don't have to pay this tax. Be sure to talk to your Realtor about your situation and ask what you can do to minimize or avoid this tax.
2. In the USA, this tax also varies from state to state as well as city to city. Some states such as Alaska, Idaho, Indiana and Louisiana don't have a real estate transfer tax. Other states like Colorado impose a very small tax, such as 0.01%. And even other locations such as the city of Pittsburgh, can charge a tax as high as 4%. The specifics vary dramatically from location to location, as well as the structure of the taxes. For instance, in Washington, DC, there is a 2.2% property transfer tax, and it is split between the seller and the buyer. You should check with your Realtor about what to expect and be sure to ask about exemptions.