Provincial land transfer tax changes effective April 24, 2017
LAWPRO encourages all lawyers who handle real estate transactions in Ontario to be aware of upcoming changes to the land transfer tax system. These changes apply to applicable purchases and acquisitions starting April 24, 2017.
The Province has announced it will collect additional information through the land transfer tax system to help it better understand trends in the real estate market. Persons who purchase or acquire land that contains one to six family residences or agricultural land are required to provide this additional information starting April 24, 2017. The prescribed information includes (but is not limited to) the following:
- whether the home is intended to be occupied by the person who purchases or acquires the land, or their family member(s), as their principal residence;
- the type of dwelling (detached, semi‑detached, condominiums, cottages, etc.);
- whether the property, in part or in whole, is intended to be leased out;
- residency, citizenship and permanent resident status, if the person who purchases or acquires the land is an individual;
- information about incorporation, ownership and control, if the purchasers are corporations; and
- information about beneficial owners, if the person who purchases or acquires the land is acting as a trustee, nominee or in a similar capacity.
The additional information will be collected through a new electronic form that will be accessible on Teranet eXpress – the Prescribed Information for Purposes of Section 5.0.1 Form (“PIPS5 Form”). Upon completing the PIPS5 Form you will get a confirmation number. See this Teraview Newsletter (dated April 13, 2017) for more information on how to login to Teranet eXpress and access the PIPS5 Form. For manual paper registrations and unregistered dispositions of land, this information will be collected on an approved form which must be delivered directly to the Ministry of Finance.
The PIPS5 Form will be available in Teranet eXpress starting April 22, 2017. Submission of the PIPS5 Form will be mandatory starting on April 24, 2017.
As of April 24, 2017, you will also be asked to select one of three statements in the provincial land transfer tax section in Teraview to indicate:
- the Confirmation Number you received upon completion of the PIPS5 Form;
- the Reason for Delay in the completion of the PIPS5 Form (a paper version must be submitted); or
- that PIPS5 prescribed information is not required for the conveyance.
As of May 8, 2017, one of these three statements must be selected in order to complete a land registration.
However, there is a transition period from April 24 to May 5, 2017, where land registrations with any deficiencies relating to the PIPS5 Form will not incur penalties. At this time, we do not know what the penalties are, nor who will be subject to them.
Please remember that the LAWPRO Policy does not cover fines or penalties, except to reimburse, after final resolution, certain expenses in the successful defence of certain prescribed penalties under the Income Tax Act and Excise Tax Act. See the LAWPRO Policy for more details.
The Ministry of Finance bulletin mentions that the PIPS5 form will provide more information and instructions on these changes. As stated above, the form will be available in Teranet eXpress on April 22, 2017.