Province Doubles Land Transfer Tax Rebates for First Time Home Buyers  & Other Changes

Back in November 2016, the Ontario government announced that they are providing some relief to the soaring housing prices for First Time Home Buyers, by increasing the Land Transfer Tax Credit Rebate.  Finance Minister Charles Sousa is doubling the tax break from $2,000 to $4,000 for eligible purchasers, which is great news!  The changes took effect on Jan. 1, 2017.

However, the Toronto Municipal Land Transfer Tax Rebate remains the same, but there are calls for Toronto (which is the only municipality allowed to charge a separate land transfer tax) to follow the provinces lead.

Land Transfer Tax Credit Rebates
Region Rebates Up To
Ontario Provincial: $4,000.00
Toronto Municipal: $3,725.00
Total Maximum LTT Rebate: $7,725.00

The up-to-$4,000 refund will effectively remove the land-transfer tax from the first $368,000 of a home price for anyone buying their first home.

It isn’t all good news.

Along with the changes, the provincial government is tightening the eligibility rules to qualify. Beginning January 1, 2017, eligibility for the first‑time homebuyers rebateprogram is restricted to Canadian citizens and permanent residents of Canada. This closes a loop hole for foreign buyers who are not permanent residents or Canadian citizens to qualify and receive provincial rebate.

Requirements to qualify for the refund.

To qualify for a refund:

  • The purchaser must be at least 18 years old.
  • The purchaser must occupy the home as their principle residence within nine months of the date of transfer.
  • The purchaser cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, at any time.
  • If the purchaser entered into an agreement of purchase and sale before December 14, 2007, the home must be a newly constructed home and the purchaser must be eligible for the Tarion New Home Warranty.
  • If the purchaser has a spouse, the spouse cannot have owned an eligible home, or had any ownership interest in an eligible 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.
  • Beginning January 1, 2017, eligibility for the first‑time homebuyers refund program is restricted to Canadian citizens and permanent residents of Canada.

Time limit to apply for refund

A qualifying purchaser must apply for the refund within 18 months after the date of registration of the conveyance or the date the unregistered disposition occurs.

For more information on the first time home buyer rebate program, please contact Nicholas Chan by email or phone at 416-889-6906.