Keeping secrets


SecretI had a client ask me an interesting question recently: can you hide your purchase price? The short answer is yes, but it is somewhat complicated.

In order to purchase a property in Ontario, you have to pay Land Transfer Tax. The main reason that your purchase price has to appear on the deed is to assess and charge you the LTT immediately on closing. If you want to keep your purchase price quiet, you can pay your LTT ahead of time. Once the office has received your tax payment, your lawyer can send a draft deed to the office, and they will put a statement into Teraview to indicate that LTT has been paid. Then, on closing, the purchase price is listed as a nominal amount, and anyone looking at your property won’t see what you paid for it.

If you want to go this route, you need to make sure that you have allowed plenty of time from when your purchase becomes a firm contract to your closing date. The LTT office can move quite slowly and you don’t want to be waiting for the deed to come back and have to extend your closing date.