Are you a first-time home buyer? If yes, then you may be eligible for a refund of all or some of the Land Transfer Tax which you will be required to pay when you purchase your home.
As this may be your first time buying a home, it is important to know that there are a number of costs associated with the purchase including the purchase price, title insurance, legal costs… just to name a few. Another cost that most first-time home buyers are usually unaware of is Land Transfer Tax.
The Ontario Government charges Land Transfer Tax whenever a property is purchased in Ontario. This Tax is calculated based on the purchase price of the property and is collected at the time of the purchase. However, being a first-time home buyer does have its advantages and big one is that you may be entitled to the Land Transfer Tax refund offered by the Ontario government.
The tax rates are as follows:
- amounts up to and including $55,000: 0.5%
- amounts exceeding $55,000, up to and including $250,000: 1.0%
- amounts exceeding $250,000, up to and including $400,000: 1.5%
- amounts exceeding $400,000: 2.0%
- amounts exceeding $2,000,000, where the land contains one or two single family residences: 2.5%.
Depending on the purchase price of the property this additional cost can be upwards of a few thousand dollars at least.
It is important to note that anyone who is buying property in Ontario that has never bought property anywhere in the world may qualify for the Land Transfer Tax refund. There are additional qualifications to meet in order to qualify for the refund such as being a Canadian resident or Citizen and occupying the property as your principle residence.
This is a one time only refund for first time homebuyers therefore you want to make sure that you take advantage of it because the next time you go to buy another property in Ontario, you will definitely have to pay the full amount of tax chargeable and you will not be eligible for the refund, whether you received it on the first purchase or not.
If you are buying a new home and think you may qualify, please contact me and I would be happy to advise you.
Associate – Business and Real Estate Law Groups
Disclaimer: This article is provided as an information resource. This article should not be relied upon to make decisions and is not intended to replace advice from a qualified legal professional. In all cases, contact your legal professional for advice on any matter referenced in this document before making decisions. Any use of this document does not constitute a lawyer-client relationship. Please note that this information is current only to the date of posting. The law is constantly changing and always evolving.