The tax follows the land, not the price. Buying the shares of a company that owns a building does not, on its own, register a conveyance of anything.
Short answer
Ordinarily, no. Section 2(1) of the Land Transfer Tax Act charges tax on “every person who… tenders for registration in Ontario a conveyance by which any land is conveyed to or in trust for a transferee” — the taxable event is a conveyance of land, registered or treated as registered. A share transfer conveys nothing: the buyer ends up owning the shares of a corporation, and the corporation continues to own whatever land it owned before, exactly as before. See Land Transfer Tax Act, R.S.O. 1990, c. L.6, s.2(1).
The Ministry of Finance states the conclusion this leads to directly: “The transfer of shares of a corporation which holds land in its own right does not ordinarily attract tax under the Act.” The reasoning given is company law, not tax law — a corporation’s property is its own, not its shareholders’, so a change of shareholder does not touch the corporation’s title. See Ministry of Finance — Land Transfer Tax and the Treatment of Unregistered Dispositions of a Beneficial Interest.
The word doing the work above is “ordinarily.” Section 3 of the Act reaches an unregistered disposition of a beneficial interest in land directly: tax is “payable to the Minister on the thirtieth day after the date of the disposition as if the disposition were a conveyance of land tendered for registration,” and it is “payable by every person who acquires a beneficial interest in land.” Where the corporation holds legal title to the real estate but someone else has always held the beneficial interest, a change in who holds that beneficial interest — something that can accompany a share sale without appearing anywhere on the land registry — is taxed on its own terms, independent of whether any shares changed hands at all. See Land Transfer Tax Act, s.3(2), (3).
Case Files: a price loaded onto the land under the building is an asset deal, not a share deal, so land transfer tax was never in question — but it shows the same real estate being subject to a second, independent statutory reallocation (an income-tax rule reassigning proceeds between land and building) that a share buyer never has to think about, because a share purchase does not touch the corporation’s cost base in its real property at all.
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