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:
The Ministry will then provide your lawyer with a special code to be entered on closing, to confirm that the land transfer tax has already been paid. The Ministry suggests that all material be sent three weeks in advance of closing to make sure it is completed in time. I’ve found that if you go in person to the Ministry office, you should be able to obtain the code that same day. The GTA location is the Ministry of Finance offices, Land Taxes department, 33 King St. West in Oshawa L1H 8H9.
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.
Mark Weisleder is a Toronto real estate lawyer. Please click here for the full article