First-Time Homebuyer? New Changes Coming Your Way

first time homebuyer ontario
first time homebuyer ontario

first time homebuyer Ontario

LTT Refund for First-time Homebuyers

If you are a First-time Homebuyer, you may qualify for a refund of all or part of the Land Transfer Tax (LTT) depending on factors such as the purchase price or consideration, and how you take title to the property.

As of the date[1] of this article, First-time Homebuyers in Ontario are eligible for an LTT refund up to a maximum of $2,000.00, which means that First-time Homebuyers pay no LTT on the first $227,500.00 of the cost of their homes.  If the property is located in the City of Toronto, there is an additional refund available up to a maximum of $3,725.00 for eligible First-time Homebuyers.

first time homebuyer

Eligibility Requirements

In order to be eligible for the LTT refund, First-time Homebuyers must meet the following conditions[2]:

  • Must be at least 18 years old;
  • Must occupy the home as your principal residence within nine (9) months of the date of transfer;
  • Cannot have ever owned an eligible home, or an interest in an eligible home, anywhere (emphasis added) in the world;
  • If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world, while he or she was the purchaser’s spouse. If this is the case, the LTT refund will not be available to either spouse.
  • If the agreement of purchase and sale was entered into before December 14, 2007, the eligible home must be newly constructed and you must be eligible for the Tarion New Home Warranty.
  • If the agreement of purchase and sale was entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.

first time homebuyer tax credit

New Changes Coming January 1, 2017

During the Province’s recent fall economic statement, Ontario Finance Minister, Charles Sousa, announced that the provincial LTT refund would be doubled from $2,000.00 to $4,000.00.  What this means is that First-time Homebuyers will not pay LTT on the first $386,000.00 of the cost of their homes, an increase of $158,500.00 in the cost of a home over the current LTT refund calculation.  The announcement was made to further assist eligible First-time Homebuyers in Ontario given the soaring house prices and, particularly in the Greater Toronto Area.  The new changes are expected to take effect at the beginning of the new year. It remains to be seen if the City of Toronto will follow the course with its municipal LTT refund.

To determine your eligibility for the First-time Homebuyer LTT refund, speak with your real estate lawyer before you begin your search for a new home.

Update For First-Time Homebuyers

As of March 1, 2017 and in keeping with the Province of Ontario’s attempt to assist new purchasers, the City of Toronto has increased its First-time Homebuyers rebate to $4,475.00, a modest increase of $750.00 from $3,725.00.

In addition to the eligibility requirements noted above, if the purchaser becomes a Canadian citizen or permanent resident within 18 months of the transfer, they may apply for and may qualify for the rebate.[3]

Calculate your land transfer tax online.

If you’re looking for skilled and experienced lawyers in Vaughan or lawyers in Toronto, Hummingbird Lawyers LLP has offices at each location for your convenience.

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