Value of Consideration on a Property

When it comes to a real estate transaction, Value of Consideration on a Property is often referenced when determining the land transfer tax (LTT) and/or municipal land transfer tax (MLTT) that is required to be paid by the purchaser of a property.  Most often, the value of consideration will simply be equivalent to the agreed upon sale and purchase price, but there are other factors that could affect this figure.

For example, a buyer who purchases a new home from a builder will usually agree to a base sale/purchase price and then indicate possible extras and upgrades after-the-fact.  These would then be factored in to determining the property's consideration value.  Structural additions that would would affect the value of consideration are:

  • upgraded flooring, cupboards, doors, windows, counters, etc;
  • architectural changes;
  • extra doors and entrances;
  • whirlpool baths;
  • finished basements;
  • roughed in washrooms; and,
  • fireplaces

Similar to the above, upgrades to land are also used to determine the consideration value of property. Some examples of these upgrades are:

  • lot premiums;
  • tree planting;
  • sodding and grading; and,
  • driveway paving

Further, if a property is being sold with a mortgage (or charge) still attached to it that can't be paid out (or discharged), such is in the case of foreclosure, then this will also have significant impact on value of consideration.  In these situations, the amount owed under the mortgage (or charge), including principal and interest, will also be added to the property's value of consideration on top of the agreed upon sale/purchase price.