Transferring a house to a family member in Ontario usually attracts no land transfer tax, provided no money changes hands and the person receiving the property does not take on the mortgage. The tax is charged on the value of the consideration, so when that figure is nil, the tax calculated on it is nil as well.
That matters because Ontario does not exempt gifts of land as a category. The Land Transfer Tax Act taxes what was given in exchange for the property, and the Ministry of Finance reads consideration broadly. Cash counts. So does a mortgage the new owner assumes, a debt that gets forgiven, and any other benefit passing between the parties. When a transfer is registered with nil entered in paragraph 4 of the land transfer tax affidavit, that figure has to be accurate.
Mortgages are where families get caught. If a parent signs a house over to an adult child and the child takes on the outstanding balance, that balance becomes the consideration and tax is payable on it, calculated the same way any Ontario purchase would be. Inside Toronto the municipal land transfer tax applies on the same footing, since Chapter 760 of the Toronto Municipal Code measures the tax against the value of the consideration and ties its exemptions back to the provincial Act.
Spouses get separate treatment. Regulation 696 under the Land Transfer Tax Act exempts a transfer between spouses or former spouses in three situations: where assuming an encumbrance such as a mortgage is the only consideration, where a written separation agreement provides for the transfer, or where a court order or judgment does. Spouse carries the meaning given in section 29 of the Family Law Act, which covers certain cohabiting couples along with married ones. Other relatives have no equivalent relief, aside from a narrow exemption for farmed land kept within the family.
Adding a relative to title follows the same logic, because it conveys an interest in the land and the share transferred is what gets measured. How that share is held, as joint tenants or tenants in common, affects what happens later. Land transfer tax is also only half the picture. The Canada Revenue Agency treats a transfer to a relative as a disposition at fair market value no matter what was paid, a separate question from selling to a family member below market value.
Related reading: Who Pays Land Transfer Tax in Ontario, the Buyer or the Seller?, How Is Ontario Land Transfer Tax Calculated in Toronto?, and Can You Sell Your House to a Family Member Below Market Value in Ontario?
