Disclaimer
The information provided in this blog and the website is for general informational purposes only and does not constitute legal advice. Reading this blog does not create a lawyer-client relationship.
Every residential property transaction in Ontario requires a lawyer, and with good reason. From the moment an Agreement of Purchase and Sale is signed, a web of legislation governs what you own, what you owe, and what happens if something goes wrong. Here’s a practical overview of how it all works.
The Legal Framework
Ontario real estate sits at the intersection of several statutes. The Land Titles Act and Registry Act govern how ownership is registered (the vast majority of Ontario properties now fall under Land Titles). The Planning Act controls severances and subdivision, title cannot transfer if the land division did not comply. The Condominium Act, 1998 adds a layer of rules for unit purchases, including mandatory status certificate review.
On the tax side, the Land Transfer Tax Act governs provincial LTT on every transfer of a beneficial interest. Federally, the Income Tax Act determines whether the Principal Residence Exemption shelters your gain, and the Underused Housing Tax Act imposes a 1% annual tax on certain non-Canadian owners of vacant or underused residential property, with annual filing obligations even where no tax is payable.
Other key statutes include the Real Estate and Business Brokers Act, 2002 (which regulates agents through RECO), the Residential Tenancies Act, 2006 (critical where the property is tenanted at closing), the Mortgages Act (discharge and enforcement), and the New Home Construction Licensing Act, 2017 (Tarion warranty on new builds).
The Agreement of Purchase and Sale
Standard residential transactions in Ontario use OREA Form 100. Once accepted within the irrevocable period, it is a binding contract. A few provisions matter most in practice.
Conditions (typically financing and home inspection) must be satisfied or waived in writing by the stated deadline. An unsatisfied, unwaived condition terminates the deal and the deposit is returned. Deposits are held in trust by the listing brokerage and credited to the purchase price on closing; if the buyer defaults after conditions are waived, the seller may be entitled to keep it.
The requisition date (Clause 8) is a deadline practitioners watch carefully. The buyer’s lawyer must deliver title requisitions by that date, or the buyer is deemed to accept title as-is, subject to matters going to the root of title. A second requisition period runs to the earlier of 30 days after the requisition date or 5 days before closing, covering non-title matters like work orders and zoning.
The Statement of Adjustments, prepared by the seller’s lawyer, prorates property taxes, utilities, rent (where applicable), and other items as of closing day, and determines the exact balance the buyer’s lawyer must deliver.
The Lawyer’s Role
Teraview, Ontario’s electronic land registration system, is restricted to licensed lawyers and law clerks, which is why legal representation on closing is mandatory, not optional.
The buyer’s lawyer reviews the APS, conducts the title search, delivers requisitions, reviews the title insurance commitment, prepares and registers the Transfer and Charge, manages closing funds, remits Land Transfer Tax, and reports to the client and lender post-closing.
The seller’s lawyer reviews the APS, responds to requisitions, obtains mortgage discharges from the seller’s lender, prepares the Transfer, and reports post-closing.
Funds flow from buyer’s counsel to seller’s counsel on closing day, after all registrations are confirmed on Teraview.
How Foote Law Can Help
Whether you’re buying your first home or transferring title within the family, having the right lawyer makes closing day straightforward. Foote Law handles the full range of residential real estate matters for clients in Orangeville, Brampton, Shelburne, Alliston, Barrie, Owen Sound, Newmarket, Guelph, and throughout the Greater Toronto Area, including:
- Purchase transactions for freehold and condominium residential properties
- Sale transactions, including mortgage discharge coordination
- Private purchase and sale transactions between parties without agents
- Title transfers between family members
- Mortgage refinancing and lender instruction files
- Bridge finance coordination
If you have questions about an upcoming transaction or want to understand what to expect at closing, reach out to our team.
Title Search and Title Insurance
The title search examines every instrument registered against the property, mortgages, liens, Construction Act holdbacks, executions, easements, and restrictive covenants, to confirm the seller’s ability to deliver clear title.
Title insurance covers what a search alone cannot: defects undiscoverable before closing, fraud and forgery, encroachments, survey issues, outstanding municipal work orders, zoning non-compliance, and the gap between closing and registration. Ontario’s two primary residential title insurers are FCT (First Canadian Title) and Chicago Title. The premium is paid once at closing; the owner’s policy runs for the life of the ownership. On a $1,000,000 purchase, expect to pay approximately $300 to $400 for an owner’s policy.
Land Transfer Tax
Provincial LTT is payable by the buyer on every transfer of a beneficial interest in land, calculated on the purchase price at marginal rates:
| Purchase Price | Rate |
| Up to $55,000 | 0.5% |
| $55,001 – $250,000 | 1.0% |
| $250,001 – $400,000 | 1.5% |
| $400,001 – $2,000,000 | 2.0% |
| Over $2,000,000 (residential, 1–2 single-family residences) | 2.5% |
First-time homebuyer rebate: Up to $4,000, fully offsetting LTT on purchases up to $368,333. To qualify, the buyer must be a Canadian citizen or permanent resident, must never have owned a home anywhere in the world, and must occupy the property as their principal residence within 9 months of closing. One nuance worth knowing: a spouse who owned a home before the relationship will not disqualify an otherwise eligible buyer, but a spouse who owned property during the marriage will.
Toronto Municipal Land Transfer Tax (MLTT): Toronto buyers pay a second, parallel LTT on top of the provincial tax. Effective April 1, 2026, City Council approved new graduated MLTT brackets for residential properties over $3,000,000. On a $5,000,000 Toronto property, the combined provincial and municipal LTT now exceeds $250,000.
Ontario Non-Resident Speculation Tax (NRST): A province-wide 25% tax on foreign buyers of residential property, applied on top of the provincial LTT. Exemptions apply for permanent residents and provincial immigration nominees; claims must be filed through Teraview at closing.
Toronto Municipal Non-Resident Speculation Tax (MNRST): Effective January 1, 2025, Toronto layers on an additional 10% MNRST for eligible foreign buyers of certain residential properties within city limits, on top of both the MLTT and the provincial NRST.
HST on New Construction
HST at 13% applies to newly constructed and substantially renovated residential properties. Several rebate programs are now in effect, and the landscape shifted significantly in early 2026.
Standard GST/HST New Housing Rebate: Available to all buyers intending a new build as their principal residence. The federal portion returns 36% of the 5% GST, capped at $6,300 (phasing out above $450,000). The Ontario portion returns 75% of the 8% provincial component, capped at $24,000 at any purchase price.
Bill C-4, First-Time Home Buyers’ GST Rebate: Bill C-4 (Making Life More Affordable for Canadians Act) received Royal Assent on March 12, 2026. It eliminates the full 5% federal GST on new homes up to $1,000,000 for eligible first-time buyers, with a linear phase-out between $1,000,000 and $1,500,000, a maximum federal saving of $50,000. The program applies to Agreements of Purchase and Sale signed on or after March 20, 2025, and runs through December 31, 2030.
Eligibility uses a 5-year look-back, not a lifetime test: buyers must not have lived in a home they owned in the five preceding calendar years. A spouse or common-law partner’s ownership history within that window can also disqualify an otherwise eligible buyer, a detail that catches many purchasers off guard.
Ontario Temporary HST Rebate on New Homes: Ontario’s Bill 114 (HST Relief Implementation Act (Residential Property Rebates), 2026) received Royal Assent on May 12, 2026. The legislation eliminates the full 8% provincial portion of HST on new homes up to $1,000,000 for Agreements of Purchase and Sale entered into between April 1, 2026 and March 31, 2027, providing up to $80,000 in provincial relief. Implementing regulations are still being finalized, so buyers with pre-construction agreements should confirm the current status of the regulatory framework with their lawyer before closing. Combined with the federal Bill C-4 rebate, eligible Ontario buyers could see up to $130,000 in total HST relief on qualifying new homes.
In most new-build transactions, the builder credits available rebates against the purchase price in the Statement of Adjustments. Where the builder does not credit a rebate, the buyer must apply to the CRA within two years of closing.
Have Questions About Your Closing?
Every Ontario real estate transaction comes with its own deadlines, rebates, and fine print. If you’re buying, selling, or refinancing and want clear answers about your file, call Foote Law in Orangeville at 519-940-8309.