The Province of Ontario requires a purchaser to pay a land transfer tax on the registration of any Transfer or Deed of Land.
For residential properties, the tax is currently calculated at the following rates:
- 5% on the first $55,000 of the purchase price,
- 1% on the balance of the purchase price up to and including $250,000,
- 5% on the balance of the purchase price up to and including $400,000,
- 2% on the balance of the purchase price up to $2,000,000, and
- 5% on the balance of the purchase price if it exceeds $2,000,000 where the land contains one or two single family residences.
In addition to the land transfer tax, Harmonized Sales Tax (HST) of 13% is paid on the value of goods and chattels transferred. The payment for land transfer tax and HST is payable to the Minister of Finance.
Who is Eligible for Land Transfer Tax Rebate?
First time homebuyers of an 'eligible home' may be eligible for a refund of all or part of the tax if:
- The buyer is at least 18 years old,
- The buyer is a Canadian citizen or permanent resident of Canada,
- The buyer cannot have owned a home or an interest in a home (this includes mobile homes) anywhere in the world, at any time,
- If the buyer has a spouse, that spouse cannot have owned a home or interest in a home anywhere in the world, while being married to the buyer,
- The purchaser must occupy the home as their principal residence within nine months of the date of transfer.
- the buyer applies for the refund within 18 months of the date of registering the conveyance.
What Qualifies as an 'Eligible Home'?
Examples include, but are not limited to:
- A detached house,
- A semi-detached house,
- A townhouse
- A mobile home,
- A condominium unit,
- A residential dwelling that is a duplex, triplex or fourplex,
- Any other residential property as may be prescribed.
How Does the Land Transfer Tax Rebate Apply?
The maximum rebate available in Ontario is $4,000. This means that no land transfer tax will be owed on a purchase price of up to $368,000. However, if the purchase price exceeds $368,000, you will still receive the $4,000 tax rebate, but you will be required to pay any tax on the remaining balance of the purchase price.
Connect With Suzanne Desrosiers Professional Corporation
If you have any questions about land transfer tax or the tax rebate, please feel free to reach out to Suzanne Desrosiers Professional Corporation by calling us at (705) 268-6492 or emailing us at info@sdlawtimmins.com and we would be more than happy to help!