Here at Axess Law, we understand that navigating the intricacies of land transfer tax in Ontario can be overwhelming, especially for first-time homebuyers. Let’s break down what you need to know and how you might be eligible for a tax refund.
Eligibility for Land Transfer Tax Refund
If you’re a first-time homebuyer, you could be eligible for a land transfer tax refund. To qualify, you must:
1. Be a Canadian citizen or permanent resident.
2. Be at least 18 years old.
3. Move into the home within nine months of the purchase date.
4. Never have owned a home before, anywhere in the world.
5. If married, your spouse should also never have owned a home during the time you’ve been together.
6. Must have an Agreement of Purchase and sale.
Important Points to Consider
How to Apply: The refund can be claimed at the time of registration. If registering electronically, complete the necessary fields under the ‘Explanation’ tab of the electronic land transfer tax affidavit. For paper registrations, file an Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes at the Land Registry Office. As of January 1, 2017, the maximum refund amount is $4,000. For transactions before this date, the maximum is $2,000.
Limitations and Exceptions
If you’re purchasing the home with a spouse and only one of you qualifies for the rebate, you can still claim 50% of the available refund. The refund will be proportionate to the share of the home owned by the qualifying individual.
Tax Rebate Coverage
The rebate will fully cover the land transfer tax up to a home purchase price of $368,333. For homes costing more than this, you’ll receive the maximum rebate but will owe the remaining land transfer tax.
At Axess Law, we’re here to guide you through this process. If you meet the eligibility criteria, we’ll assist you in filing the necessary documents to claim your land transfer tax refund. To learn more, consider attending one of our real estate webinars or reach out to us directly.