Humber/Ontario Real Estate Course 2 Exam Practice

Provincial land transfer tax is generally:

1. A flat fee

2. Non-refundable for first-time buyers

3. Paid when the purchase agreement is signed

4. A closing cost paid by the buyer

5. Variable based on land type

6. Paid by the seller

The correct answer is: A closing cost paid by the buyer

Provincial land transfer tax is a closing cost paid by the buyer. This tax is typically calculated based on the purchase price of the property being transferred. Unlike other fees or taxes that may be negotiable between the buyer and seller, the land transfer tax is usually the responsibility of the buyer to pay upon closing. It is important for buyers to factor in this cost when budgeting for a real estate transaction in Ontario. Option A is incorrect because provincial land transfer tax is not a flat fee but rather calculated based on the purchase price of the property. Option B is incorrect because first-time buyers may be eligible for a refund or rebate on their land transfer tax in some circumstances. Option C is incorrect because provincial land transfer tax is typically paid at the time of closing, not when the purchase agreement is signed. Option E is incorrect because while land transfer tax rates may vary based on the location of the property, it is not typically based on the type of land. Option F is incorrect because the buyer is usually responsible for paying the provincial land transfer tax, not the seller.