ONTARIO LAND TRANSFER
(Revised January, 2017)
A) FIRST TIME BUYER BUYING
FROM A BUILDER
Important information about the Ontario
Land Transfer Tax Refund: Effective April 1, 2000, the Ontario Land
Transfer Tax Act was amended making the refund to eligible first-time
purchasers of newly constructed homes permanent so that it is no longer
necessary (as it was in past years) to be concerned
with annual renewals of the program.
NOTE: (a) On December 13, 2007, the Ontario government's mini
budget announced that first time buyer Ontario land transfer tax refund
(up to $2,000.00) will also be extended to resale homes provided
that the offer was accepted on or after December 14, 2007: See below,
section B, FIRST TIME BUYER BUYING A RESALE HOME.
(b) On November 14, 2016, the Ontario government increased the first time
buyer reduction from $2,000 to $4,000 (on first $368,000 of price) on deals
closing after January 1, 2017, PROVIDED THAT, if the purchase agreement
was accepted after November 14, 2016, the FIRST TIME BUYER to receive ANY
Ontario LTT reduction MUST ALSO be a Canadian Citizen or be a
Permanent Resident; if not, there is no Ontario LTT deduction. In the event
the buyer becomes a Canadian Citizen or Permanent Resident within 18 months
of closing, the buyer can apply for a refund (within 18 months of the closing
date) directly to the Ontario Government, but the Ontario LTT must
be paid in full on the closing date.
FIRST TIME BUYER OF NEW HOME:
You must be a first-time home buyer of a newly constructed
home or condominium registered with the Ontario New Home Warranty Program
(ONHWP). Condo conversions (from older buildings) do NOT qualify!
Your Agreement must have been accepted by the builder on or after May
8, 1996 and you must use the home as your principal residence within 9
months of the closing date.
NEVER OWNED A HOME: You (or your spouse) must
be at least 18 years of age and never owned an interest in a home anywhere
in the world (since you became spouses). Spouse includes
a common-law spouse of three (3) years or more or where there
is a natural or adoptive child between the common-law spouses. If, since
becoming spouses, both spouses did not own a home, but one spouse owned
a house which was sold prior to marriage (resulting in such spouse who
did own a home being disqualified as a first-time buyer), the remaining
first-time buyer spouse may claim total available refund (even if both
spouses take title).
PARTNERSHIP PURCHASE (NON-SPOUSAL): If father
and son buy a home (or any two non spouses) and one (only) is a first-time
buyer with a 50% interest (for example), such first-time buyer can claim
a refund of 50% of the Ontario Land Transfer Tax refund available being
half of $4,000.00.
If your Agreement with the builder was entered into:
i. on or before March 31, 1999, maximum refund is $1,725.00;
ii. on or after April 1, 1999, maximum refund is $4,000.00.
a) The refund is instantly available on closing of the real estate
purchase. Any amount of Ontario land transfer tax above the allowed
maximum refund must be paid on closing.
b) Where a qualifying purchaser did not claim an immediate refund
at time of a purchase closing, the tax will be payable at that time
and a refund claim may be made directly to the Ministry of Finance.
This application must be made within eighteen months of registration
of the conveyance and no interest is payable on this refund. The following
documentation must be submitted in order for a refund claim to be processed
(if claim for refund was not made by purchaser's lawyer, for the purchaser,
at the time of closing):
1. A properly completed Ontario
Land Transfer Tax Refund Affidavit form,
2. Copy of the registered transfer/deed,
3. Copy of the agreement of purchase and sale,
4. Copy of the statement of adjustments at time of completion of purchase,
5. Copy of the Tarion New Home Warranty Certificate.
TIME BUYER BUYING A RESALE HOME
In addition to first time buyers (who buy
from a builder) being entitled to a land transfer tax refund of up to
$4,000.00, first time buyers of resale homes will also now be
eligible for a rebate of Ontario Land Transfer Tax of up to $4,000.00
on any resale home purchased in Ontario where the purchase closes
on or after January 1, 2017. The refund is instantly available
on the closing date.
Eligibility requirements for resale
homes, is the same as for new builder homes:
- Purchaser must be 18 years or older
- Must use property as principal residence within 9 months of closing
- The spouse of the first time buyer must not have owned any residential
property anywhere in the world during the marriage
- If the offer to purchase was accepted AFTER November 14, 2016, any
buyer claiming to be a FIRST TIME BUYER, being entitled to a deduction
must ALSO be either a Canadian Citizen or a Permanent Resident
or if not, must pay full Ontario LTT and apply for refund if
within 18 months of the closing date, the buyer applies for the refund
after achieving Canadian Citizenship or Permanent Resident status
within such 18 months
Stephen H. Shub Professional Corporation
Barrister, Solicitor, Notary
(Head Office) 5799 Yonge St. #803, Toronto, Ontario Canada
Tel: (416) 520-6120 Fax: (416) 222-4277
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