Ontario

Contributing Editor: Ray Leclair
Updated: March 18, 2018

Law

Question 1: Under which legislation is the registration system governed?

Answer:

Common Law and legislation

Registry Act (1795)

Land Titles Act (1885)

Land Registration Reform Act (1985)

Possessory Title

Question 2: Can title to property be obtained by adverse possession over a period of time?

Answer:

Yes. Under Registry Act after 10 years.

No. Under Land Titles Act, subject to matured rights prior to conversion.

Most of the titles in the province are now within Land Titles Act.

Title Search Period

Question 3: What is the title search period?

Answer:

Registry Act lands - 40 years from the date of the signing of the Agreement of Purchase and Sale.

Land Title Act lands - only documents outstanding or referred to on abstract.

Agreement of Purchase and Sale (APS)

Question 4: Is there a standard APS used for most transactions or is it tailored for each property?  Who generally prepares the agreement?

Answer:

Residential Transactions:

The Ontario Real Estate Association (OREA) prepared a standard agreement used by Real Estate agents across Ontario for most residential transactions. The agreement is now available electronically to all Ontario lawyers via an arrangement with OREA. Most agreements are prepared by the Real Estate agent before any lawyer is consulted.  

Commercial Transaction:

Although the OREA agreement may be used for smaller deals, generally there is no standard agreement for commercial transactions. Agents will often prepare an agreement, however, lawyers are often retained during the drafting and negotiations on larger transactions.

Access to Registry

Question 5: How is a search of title conducted?  How is registration completed?

Answer:

Search: For properties converted to the electronic registry software, the search is

available on-line on the lawyer's desktop. Copies of the title abstract, documents and plans registered are available to be printed on the lawyer's office computer.

Registration: Electronic registration is mandatory throughout Ontario’s  54 registry county offices via software (Teraview) operated by Teranet, a private company under contract with the government until 2067. In 2018, the Teraview desktop software was migrated to a cloud service.

Surveys

Question 6: How are surveys part of the transaction?

Answer:

Surveys remain essential to proper conveyancing, however, their use has

severely declined. A survey is not required for registration of an interest in land (e.g. transfer), but encouraged to determine the extent of title (i.e. boundaries). Generally required by lenders, however, they will accept a title insurance policy as a substitute. If a survey exists, it may be updated by the vendor's statutory declaration that there has been no changes or setting out any minor changes.

Property

Question 7: How can property be held?

Answer:

Individuals can hold title as tenants in common or joint tenants.

A corporation or partnership may also be registered as an owner.

Comments:

Although many trusts are created, they are not recognized by the Land Titles registration system and cannot be registered as such.

Registration

Question 8: What is the registration process?

Answer:

Registration is fully digitized with online access via the lawyer’s desktop computer (Teraview software).  In 2018, the software was replaced with a cloud service using a hard or soft token which produces a unique 6-digit number required for registration.

Comments:

The registration is instantaneous, producing a registration number, date and time of registration, however, the registry office has 21 days to review and certify the registration, during which time it can be rejected.  After 21 days, the registration is deemed certified if the registrar has not acted on it. The certification process may typically be only days unless the system is busy.

Land Transfer Tax

Question 9: Is there a land transfer tax applicable to the usual transfer?  How is it known? How much? Are rebates available?

Answer:

There is a provincial land transfer tax applicable to all land (https://www.fin.gov.on.ca/en/tax/ltt/) and a municipal land transfer tax for property within the City of Toronto boundary (https://www.toronto.ca/services-payments/property-taxes-utilities/municipal-land-transfer-tax-mltt/).

Ontario LTT Rebate:

As of January 1, 2017, no land transfer tax will be payable by qualifying first‑time purchasers (similar definition as below) on the first $368,000 of the value of the consideration for eligible homes. First-time purchasers of homes greater than $368,000 would receive a maximum refund of $4,000.

MLTT Rebate:

For conveyances and dispositions of beneficial interest in land of an eligible home on or after March 1, 2017, and a rebate of up to $4,475.00. The definition of a first-time purchaser is:

  • the purchaser is at least 18 years of age
  • the purchaser must occupy the home as their principal residence no later than nine months after the date of the conveyance or disposition
  • the purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time
  • if the purchaser has a spouse, the spouse cannot have owned a home, nor had any ownership interest in a home, anywhere in the world while they were the purchaser’s spouse, and:
  • the purchaser is a Canadian citizen or permanent resident of Canada. If the purchaser becomes a Canadian citizen or permanent resident within 18 months of the transfer, they may apply for and may qualify for the rebate

Since April 21, 2017, Ontario also has a Non-resident Speculation Tax of 15% on residential property acquired by individuals who are not citizens or permanent residents of Canada or by a foreign corporations and taxable trustees. This tax is applicable to property within the Greater Golden Horseshoe Region (Toronto & southern Ontario). (https://www.fin.gov.on.ca/en/bulletins/nrst/)

Comments:

When you acquire land or a beneficial interest in land, you pay land transfer tax to the province when the transaction closes. The electronic registration system calculates and transfers the tax from the lawyer’s bank account when the documents are submitted for registration.

Land transfer tax is normally based on the amount paid for the land, in addition to the amount remaining on any mortgage or debt assumed as part of the arrangement to buy the land.

In some cases, land transfer tax is based on the fair market value of the land, such as in the following examples:

  • transfer of a lease with a remaining term that can exceed 50 years
  • transfer of land from a corporation to one of its shareholders, or
  • transfer of land to a corporation, if shares of the corporation are issued.

If an agreement of purchase and sale is entered into after November 14, 2016, and registration or the disposition occurs on or after January 1, 2017, the tax rates on the value of the consideration are as follows:

  • amounts up to and including $55,000: 0.5%
  • amounts exceeding $55,000, up to and including $250,000: 1.0%
  • amounts exceeding $250,000, up to and including $400,000: 1.5%
  • amounts exceeding $400,000: 2.0%
  • amounts exceeding $2,000,000, where the land contains one or two single family residences: 2.5%.

Toronto LTT:

For all conveyances and unregistered dispositions of beneficial interest in land made on or after March 1, 2017.

For property containing at least one, and not more than two, single family residences with a consideration value of:

  • Value of ConsiderationMLTT Rate
  • Up to and including $55,000.000.5%
  • $55,000.01 to $250,000.001.0%
  • $250,000.01 to $400,000.001.5%
  • $400,000.01 to $2,000,000.002.0%
  • Over $2,000,000.002.5%

For all other non-single family residences with a consideration value of:

  • Value of ConsiderationMLTT Rate
  • Up to and including $55,000.000.5%
  • $55,000.01 to $250,000.001.0%
  • $250,000.01 to $400,000.001.5%
  • Over $400,000.002.0%