First-time homebuyers Rebates;
First-time buyers of new and re-sale homes are eligible for rebates on provincial and Toronto land transfer taxes. The maximum first-time home buyers can receive for provincial land transfer tax (LTT) is $2,000 and for Toronto LTT is $3,725.
The provincial LTT is payable anywhere in Ontario, including Toronto. As mentioned before, the maximum that a first-time buyer can receive for the provincial LTT is $2,000. For re-sale homes, the provincial rebate only applies to first-time buyers who entered into Agreements of Purchase and Sale after December 13, 2007.
Toronto LTT is payable only for properties in the City of Toronto. The maximum a first-time home buyer can receive is $3,725. The Toronto LTT rebates are in addition to any provincial LTT rebate the buyer qualifies for.
The buyer is considered to be a first-time buyer for the provincial and Toronto LTT if they are at least 18 years of age and must not have previously owned a home anywhere in the world at anytime. If a spouse is involved, the spouse cannot have owned a home or had any ownership interest in a home while he/she was the purchaser's spouse.
Who pays Land Transfer Tax?
When you acquire a property or land, you pay Land Transfer Tax to the province when the transaction closes. Land Transfer Tax is normally based on the amount paid for the property.
Purchasers in most large Canadian centres can add Land Transfer Taxes to their list of closing costs. These taxes, levied on properties that are changing hands, are the responsibility of the purchaser. Depending on where you live, taxes can range from a half a per cent to two per cent of the total value of the property. Many provinces have multi-tiered taxation systems that can prove complicated. If you purchase a property for $260,000 in Ontario, for example, .5 per cent is charged on the first $55,000, 1 per cent is charged on $55,000 - $250,000, while the $250,000 - $400,000 range is taxed at 1.5 per cent. Your total tax bill? $2,375.00.
The following illustrates Land Transfer Taxes for Ontario.
Land Transfer Tax ( go to calculator )
Up to $55,000 X .5 % of total property value
From $55,000 to $250,000 X 1 % of total property value
From $250,000 to $400,000 X 1.5 % of total property value
From $400,000 up X 2 % of total property value
Toronto( go to calculator )
If you are purchasing a property in Toronto, you are required to pay the Provincial Land Transfer Tax and the Municipal Transfer Tax.
Municipal Land Transfer Tax
Up to and including $55,000 x 0.5% of the total property value
From $55,000.01 to $400,000 x 1% of the total property value
Over $400,000.01 x 2% of the total property value
If you are a first-time homebuyer and are unsure if you are eligible feel free to contact Luke and he will be able to help.