Buying your first home in Ontario? Good news, you may be eligible for a refund!
Usually, when you buy or acquire an interest in land in Ontario, you pay something called Land Transfer Tax. This tax applies to all conveyances of land in Ontario, but first-time homebuyers may be eligible for a refund of all or part of the tax payable.
To claim a refund, you must be at least 18 years of age, cannot have owned a home or an interest in a home anywhere in the world, and your spouse cannot have owned a home or an interest in a home, anywhere in the world while he or she was your spouse.
You can apply for a land transfer tax “refund” at time of registration which basically means you do not have to pay the amount of the refund on closing.
The maximum amount of the refund is $4,000 so no land transfer tax would be payable by qualifying first time purchasers on the first $368,000 of the value of the consideration for eligible homes. First time purchasers of homes greater than $368,000 would receive a maximum refund of $4,000, but would be required to pay the difference in Land Transfer Tax that exceeds $4,000.
The refund is reduced if one (or more) of the purchasers is not a first time homebuyer. The refund will be proportionate to the interest acquired by the individuals who qualify for the refund.
You can find out how much land transfer tax is on a potential purchase in Ontario (not including properties in the GTA which have another additional tax) with our handy calculator here.
For more on the costs and process of buying your first home, contact us.
Written by Heather Dixon and Nahal Golmohammadi