Apr 202012

First-time home buyers may save up to $2,000.00

First time home buyers who meet the following eligibility requirements may be funded up to $2,000 of their Land Transfer Tax paymentbuying a home.

  • The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.
  • The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
  • If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world, while he or she was the purchaser’s spouse. If this is the case, no refund is available to either spouse.
  • The purchaser cannot have previously received an Ontario Home Ownership Savings Plan (OHOSP)-based refund of land transfer tax.

Land Transfer Tax applies to all sales of land in Ontario. The Land Transfer Act defines definition of land is broad and includes lands, buildings, structures, structures to be constructed, fixtures and any interest in these.
For Sale Price (SP) 0f;

Quick Land Transfer Tax calculations are as follows;

Up to and including $55,000 = SP × 0.005

Exceeding $55,000 and up to $250,000 = (SP× 0.01) – $275
Exceeding $250,000, for property other than residential = (SP× 0.015) – $1525
Exceeding $250,000 up to $400,000, for residential property = (SP × 0.015) – $1525
For residential property exceeding $400,000 = (SP × 0.02) – $3525

For example, a couple purchases a home for $250,000.00

The Land Transfer Tax would be calculated as ($200,000 x 0.01) -$275

or $2,500 – $275 = $2225 

If the couple were qualified first-time buyers, they would be eligible for a $2,000 refund

$2225- $2000 = $225 net Land Transfer Tax

Time Limit to Apply for Refund

A qualifying purchaser must apply for the refund no later than 18 months after the date of registration of the conveyance or the date the unregistered disposition occurs.

Most purchasers will apply for the refund in their lawyer’s office at the time of purchase

Details of the Land Transfer Tax Refund