Exempt Lease Transfers

• Certain lease transfers do not attract land transfer tax. If you submit a contract for registration, where the contract involves the granting of a new lease to a leaseholder, or the transfer of an existing lease to a different leaseholder, the new leaseholder may not have to pay transfer tax. The tax does not apply to leasehold transfers where the term of the lease, or the remaining term of an existing lease, is 50 years or less. This term of 50 years must be the maximum amount of time that the lease can run, including any lease extensions allowed by the lease contract. (reference 1, section 1 (6))
  
  

Amount of Tax

• The amount of tax you pay when you register a transfer of land with the land registry depends on the price you are paying for the land. If you pay $55,000 or less for the land, you must pay 0.5 percent of the sale price. Where the purchase price is more than $55,000 and up to $250,000, you pay tax at a rate of 1 percent. A purchase of land for more than $250,000 means you have to pay tax at a rate of 1.5 percent unless the land you are buying contains either one or two single family residences, when you would have to pay an extra 0.5 percent on any amount over $400,000 that you pay.
  
  

Registration

• Every contract involving a transfer of the beneficial interest in land must be registered with the land registry. Beneficial interest refers to the person or persons having the right to enjoy full use of the land, and this includes people acquiring leases to use land as well as people who purchase land outright. When you register a contract with the land registry, your registration document must contain specific information. This includes the monetary value of the sale and a breakdown of how the sale is being settled, including any amounts of cash or property or other securities, such as bonds or shares, used to buy the property. If the sale price is over $400,000 you must say whether the land contains one or two single-family residences.
  
  

Penalties

• If you purchase land and do not pay the land transfer tax applying to the purchase, you may face penalties imposed by the minister of finance. If the minister has reason to believe that you intended to evade paying the tax, the minister may impose a financial penalty. The penalty is whichever is the greater of 25 percent of the tax you failed to pay or $500. You still have to pay the tax alongside any penalty. If you pay less tax than you should pay, the minister can impose a penalty of 5 percent of the amount of tax that you failed to pay, along with payment of the tax.