Land Transfer Tax Between Family Members in Ontario: What Is Exempt

By Jatin Dua · Broker of Record, RE/MAX Quantum Realty · Updated 2 November 2026 · 11 min read — When Ontario land transfer tax applies to a family transfer, the spousal exemptions, the mortgage trap, and the CRA fair market value rules.

This guide is for Ontario parents, children and spouses thinking about moving a home, or a share of one, to a family member. You will learn when Ontario land transfer tax is owed and when it is nil, the three spousal exemptions, how Toronto’s extra tax fits in, and the income tax rules the Canada Revenue Agency (CRA) applies to family transfers. It is general information, so confirm your own plan with a real estate lawyer and an accountant before anything is signed.

Do you pay land transfer tax when you transfer a house to a family member in Ontario?

Sometimes. Ontario’s land transfer tax is charged on the value of the consideration for a transfer. That means what the new owner gives for the property: the price, any mortgage or other debt they take over, and any other benefit given as part of the deal.

The Land Transfer Tax Act does not exempt gifts just because the people are related. But the Ministry of Finance explains that if nothing at all passes between the parties, directly or indirectly, the value of the consideration is nil, so the tax is nil too. In plain terms:

• A clean gift with no money paid and no mortgage on the home: tax is usually nil.
• A gift of a home with a mortgage that the family member takes over: tax is charged on the mortgage balance, whatever the relationship.
• A sale to a family member, even at a discount: tax is charged on the price paid plus any debt assumed.

The relationship between the parties and the reason for the transfer must be stated on the land transfer tax affidavit that is filed with the transfer.

How is land transfer tax calculated on a family transfer?

The same Ontario rates apply as on any purchase. They are charged in layers on the value of the consideration:

Source: Ontario Ministry of Finance, Calculating Land Transfer Tax.

Two worked examples, using the Ministry’s formulas:

• A parent gives a house to a child, and the child takes over a $300,000 mortgage. The value of the consideration is $300,000. Ontario tax is ($300,000 x 1.5%) minus $1,525, which is $2,975.
• A parent sells a house to a child for $600,000. Ontario tax is ($600,000 x 2%) minus $3,525, which is $8,475. If the child is a first-time buyer who qualifies, Ontario’s refund can cover up to $4,000 of that.

Inside the City of Toronto, the municipal land transfer tax can be owed on top. My Toronto land transfer tax guide has both sets of rates and the first-time buyer rebates.

Is a gift of a house to my child exempt from land transfer tax?

Only if it is truly a gift with nothing given back. Three things can turn a “gift” into a taxable transfer:

1. A mortgage on the home. If your child takes title subject to a mortgage, tax is payable on the amount owing at registration. The Ministry says this applies regardless of the relationship, with an exception only for certain spousal transfers.
2. Any payment. Money your child pays you, even well below market value, is consideration.
3. Any other benefit. The Ministry says that if any benefit is given for the land, the transfer cannot be treated as nil consideration or as a transfer for “natural love and affection” only.

Adding a child to your title is also a transfer. Your child is acquiring an interest in the home. If they take on part of the mortgage, tax can be owed on that share of the debt. Your lawyer works out the exact figure and how the affidavit is completed.

One change that is not taxed: switching the form of ownership between the same owners, from tenants in common to joint tenants or the other way around. The Ministry says that is not a conveyance of land under the Act.

Is a transfer between spouses exempt from land transfer tax?

Not automatically. The Ministry says transfers between spouses or former spouses are taxable unless a specific exemption applies. Ontario Regulation 696 exempts a spousal transfer in three situations:

Source: Ontario Ministry of Finance, Transfers of Land Between Spouses (Bulletin LTT 1-2012) and Transactions for Nominal Consideration.

“Spouse” uses the Family Law Act definition. That covers married couples, and unmarried couples who have lived together continuously for at least three years, or who are in a relationship of some permanence and are the natural or adoptive parents of a child. A couple who has lived together for two years with no child together does not meet it.

Which other family transfers are free of land transfer tax?

• From an estate to a beneficiary. When the estate trustee transfers a home to someone receiving it as their share of the estate, the Ministry says it is not taxed under the Act.
• Fixing an error. A deed that only corrects a wrong legal description, with nothing paid, is nil if tax was properly paid or exempted on the original document.
• Splitting land fairly. When co-owners partition one parcel and each receives land equal in value to their original share, no tax is payable.
• Family farms and family business corporations. The Ministry’s land transfer tax guides list narrow exemptions for certain transfers of farmed land and certain transfers to family business corporations. Each has its own strict conditions, so get legal advice before relying on one.

If a parent has died, my guide to selling a house after a death in Ontario covers probate and timing.

Does Toronto’s municipal land transfer tax apply to family transfers?

If the home is in the City of Toronto, the municipal land transfer tax applies in addition to the Ontario tax. The City says its exempt transactions are defined in Toronto Municipal Code Chapter 760, so ask your lawyer to confirm the Toronto side of any exemption you claim.

The City also audits exemptions claimed at registration. If you are selected, you must provide supporting documents, and the City says to keep records for seven years. If you cannot support the exemption, the tax becomes payable right away with interest and penalty.

What does the CRA say about giving or selling a home to family?

Land transfer tax is only half the story. The federal Income Tax Act has a fair market value rule for family transfers, in section 69:

• If you give property as a gift, you are treated as if you sold it for its fair market value. The person who receives it is treated as buying it at fair market value.
• If you sell to a relative for less than fair market value, you are still treated as selling at fair market value. The law gives the buyer no matching step-up, so the buyer’s cost is generally what they actually paid.

That second point is a trap. Say a parent sells a rental condo worth $900,000 to a child for $500,000. The parent is taxed as if they sold for $900,000. The child’s cost is $500,000. When the child later sells for $900,000, the child has a $400,000 gain on paper, so the same growth can be taxed twice. A properly documented gift or a full-value sale avoids that problem.

If the home was the parent’s principal residence for every year they owned it, or every year but one, the gain on that deemed sale is usually not taxed. The CRA still expects the sale to be reported on Schedule 3, with the principal residence designation on Form T2091(IND), and only one home per family can be designated for each year. My guide to capital gains tax when you sell a home explains how that exemption works.

How do the attribution rules work for spouses and children?

Spouses and common-law partners are treated differently from children.

• Spouse: no tax on the transfer. Under section 73, when you both live in Canada, capital property you transfer to your spouse or common-law partner moves at your tax cost, so no gain is triggered, unless you elect otherwise on your return.
• Spouse: the gain comes back to you later. Under section 74.2, if your spouse later sells that property while you are still together and living in Canada, the taxable gain is generally taxed in your hands, not theirs.
• Spouse: income comes back to you too. Under section 74.1, rent or other income from property you transferred to a spouse is generally taxed to you.
• Children under 18. Income from property you transfer to a related child under 18, such as rent, is generally taxed to you. These rules do not attribute the minor’s capital gains back to you.
• Adult children. These attribution rules do not apply to a gift to an adult child. The fair market value rule above still does.

My guide to giving your children money from a house sale goes deeper on gifts, loans and attribution.

Should I add my child to the title of my Ontario home?

People often do it to plan for their estate, since Ontario’s estate administration tax is 1.5% of an estate’s value above $50,000. But putting a child on title is a real transfer of ownership, with real effects:

• Land transfer tax may apply to any mortgage share the child takes on.
• For income tax, you may be treated as selling part of the home at fair market value, which matters most if it is not your principal residence.
• Your home becomes partly tied to your child’s own tax and family situation.
• You may need your child’s signature to sell, refinance or change the mortgage later.

Whether a child added to title owns the share outright or holds it for you depends on the facts and the paperwork. That is exactly the question a real estate lawyer should answer before you sign. My guide on how to choose a real estate lawyer in Ontario can help you find the right one.

What to do next

1. Write down what will pass between you and the family member: cash, a mortgage, or nothing at all.
2. Get the home’s current market value. The CRA rules work from fair market value, not the price you agree on.
3. Ask your accountant how section 69, the principal residence exemption and any attribution rules apply to your plan.
4. Have a real estate lawyer confirm the land transfer tax, prepare the affidavit and check whether Toronto’s tax applies.
5. Use the estimator on this page to get a starting value for your home before those conversations.

Frequently asked questions

Sources

• Ontario Ministry of Finance: Calculating Land Transfer Tax
• Ontario Ministry of Finance: Transfers of Land Between Spouses
• Ontario Ministry of Finance: Transactions for Nominal Consideration
• City of Toronto: Municipal Land Transfer Tax information
• Income Tax Act, section 69: Inadequate considerations
• Income Tax Act, section 73: Transfers to a spouse or common-law partner
• Income Tax Act, sections 74.1 and 74.2: Attribution rules
• Canada Revenue Agency: Principal residence and other real estate

Related reading

• Average Property Tax in Toronto for 2027: Per Year, Per Month, by Home Value
• Toronto Property Tax Due Dates and Payment Options Explained
• GTA Property Tax Rates Compared: Toronto, Mississauga, Brampton, Vaughan and More
• Property Tax on Vacant Land in Ontario: How It Works