Photo: James Bombales

It’s hard enough to save up for a downpayment in Canada’s priciest housing markets without worrying about additional closing costs.

In some cities, the land transfer tax (LTT) — the tax for the transferring of real estate property and ownership — can be relatively small. But in others, home buyers have to cough up thousands of additional dollars.

“LTT (or equivalent fee) is based on the total purchase price of a home. It is a cost that must be paid in cash upon closing and it cannot be mortgaged,” reads a new report on land transfer fees from Zoocasa. “[This requires] buyers in the most expensive and heavily-taxed housing markets to save for years longer to have that cash in hand, compared to more affordable markets with a moderate fee structure.”

Zoocasa has rounded up the Canadian housing markets with the highest and the lowest land transfer fees. Unsurprisingly, Vancouver comes in at the top spot, with the LTT for the average home sitting at a whopping $20,076. Toronto comes in second, with an average LTT of $16,687.

“Closing costs can be pretty substantial, and can certainly have a real impact when it comes to saving up for a home,” Zoocasa managing editor Penelope Graham tells Livabl. “Because the cost of an LTT can vary really wildly from city to city and province to province, home buyers may want to try and make a strategic choice.”

Toronto, for instance, is the only Canadian housing market subject to both a municipal and provincial LTT.

“Not only do Torontonians have to contend with the fastest-growing home prices in the country, they’re also the only city to absorb a double-whammy, taxed in full at both the provincial and municipal level,” reads the report.

On the other side of the spectrum, first time buyers in Windsor and London pay no LTT, once provincial rebates for first-time buyers are factored in.

“If you’re a first time buyer and you’re eligible for the [$4000] rebate, those markets come in under the threshold for those prices,” explains Graham.

Canada’s other priciest markets include Victoria, with an average LTT of $12,270, Abbotsford ($8780) and Kelowna ($8659). Less expensive markets include Edmonton ($239), Calgary ($269) and the Niagara region ($629.)

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