First Time Home Buyer Rebates - Land Transfer Tax Rebates.

Toronto & Ontario First Time Home Buyer Rebates.

What is land transfer tax?  Land transfer tax applies to all properties that are transferred from one owner to another.  If you live in Toronto, there is the Municipal land transfer tax and Provincial land transfer tax that you will have to pay.   To offset these taxes, the Government has rebates for First Time Home Buyers.  

Toronto Land Transfer Tax Rates

Home Purchase Price             Tax Rate
Up to $55,000                                 0.5%
$55,000 to $250,000                    1.0%
$250,000 to $400,000                 1.5%
$400,000 to $2-million                2.0%
$2-million and over                       2.5%

Current Ontario Land Transfer Tax Rates:    

Home Purchase Price             Tax Rate
Up to $55,000                                 0.5%
$55,000 to $250,000                    1.0%
$250,000 to $400,000                 1.5%
$400,000 to $2-million                2.0%
$2-million and over                       2.5%

Who qualifies for this rebate?

  • Must be a Canadian citizen or a permanent resident of Canada.  If the purchaser is in the proceedings to become either a permanent resident or a Canadian citizen within 18 months of the purchase, they will qualify for the rebate.
  • You bought a re-sale home after December 13, 2007.   The refund applies to all homes, whether newly constructed or resale. 
  • The home was purchased before December 14, 2007, the refund only applies on the purchase of a newly constructed home.
  • Applications for a refund must be made within 18 months after the land was transferred.

How much rebate will you receive?

  • The maximum amount of the refund is $4,000 and can be claimed at the time of registration to offset the land transfer tax owed. 
  •  For the municipal land transfer tax (applies only to land in Toronto) the maximum rebate is $3,725 if you bought before March 1, 2017.   If you bought after March 1, 2017, you can get a rebate of up to $4,475.  To find out how much land transfer tax would be, click HERE for a land transfer tax calculator.

Who is considered a first-time home buyer?

  • Those at least 18 years of age.
  • The purchaser must occupy the home as his/her principal residence no later than nine months after the date of the conveyance or disposition.
  • Never has owned a previous home, or had any ownership interest in a home, anywhere in the world. 
  • If the buyer on title has a spouse, the spouse cannot have owned a home, nor had any ownership interest in a home while being your spouse.

How do you apply?

Qualifying individuals may claim an immediate refund at time of registration in one of two ways:

  • Registering Online or,
  • By filing an Ontario Land Transfer Tax Refund Affidavit for First-time Purchasers of Eligible Homes at the Land Registry Office.
  • If you haven’t claimed the refund at the time of transfer, the following documentation must be submitted to the ministry of finance.

In order for a claim to be processed by the Ministry of Finance:

  • A copy of the docket summary will also be required if the conveyance was registered electronically;
  • A properly completed form - Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes
  • A copy of the agreement of purchase and sale, together with all schedules, amendments and assignments along with a copy of the statement of adjustments relating to the conveyance;
  • A copy of a document that provides proof of occupancy of the home.  For example, copies of telephone/cable bills, newspaper/magazine subscriptions, driver’s license etc., and
  • A copy of the registered transfer/deed. If not registered electronically, this should be a photocopy of the Land Registry Office’s original which shows the tax paid;
  • For agreements of purchase and sale entered before December 14, 2007, a copy of the Tarion New Home Warranty, which is also known as the Certificate of Completion and Possession.

The application and any refund payment are subject to audit and charges could be laid and fines received if a person obtains or attempts to obtain a refund by deceit, falsehood or any fraudulent means.

Harmonized Sales Tax - Do you have to pay HST when you buy a home?

As of July 1st, 2010, Dalton Mcguinty introduced the Harmonized Sales Tax (HST) which applies to newly constructed or substantially renovated homes, but does not apply to resale homes. 
Buyers of new homes will receive a rebate of the provincial portion of the HST up to $25,000 regardless of the price of the new home.

First Time Home Buyer's Tax Credit

First time home buyers may be eligible for a 15% income tax credit or a maximum of $750 for closing costs such as legal fees, land transfer taxes, etc.  Only applicable for those who purchased a home after 1/27/2009 and is only claimable the year in which the home is acquired. 
For any further questions regarding first time home buyer rebates, please contact me for further clarification.

jay vroom