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First-Time Homebuyer Land Transfer Tax (“LTT”) Refund

By Kormans LLP

Let’s have a quick overview of the LTT refund offered by the Ontario government and Municipality of Toronto for first-time homebuyers to assist them on their first real estate purchase of an eligible home.

 

Who pays LTT?

When you purchase land or an interest in land in Ontario, you must pay LTT which is a formula based upon the purchase price.

First-time homebuyers in Ontario may be eligible for a refund of all or part of the LTT.

Similarly, if you purchase land or an interest in Toronto, you must pay a municipal LTT (“MLTT”), in addition to the provincial LTT. Those purchasing an eligible home in Toronto may receive a separate refund through the municipality in addition to the provincial LTT refund.

Beginning January 1, 2017, no land transfer tax is payable on the first $368,000.00 of the value of consideration of eligible homes. If the purchase price of the eligible home is greater than $368,000, LTT is payable, and a first-time homebuyer would be eligible to receive a refund up to the maximum refund amount.

 

How much is the LTT Refund?

Beginning January 1, 2017, the maximum amount of the provincial LTT first-time homebuyer refund is $4,000.

For purchases of an eligible home in Toronto on or after March 1, 2017, a first-time homebuyer is eligible for the MLTT refund at the maximum amount of $4,475.

If one of the purchasers is not a first-time homebuyer, the LTT refund amount will be proportionate to the interest acquired by the purchaser who does qualify for the LTT refund.

For assistance on calculating your LTT, use our LTT calculator tool.

 

Who Qualifies as a “First-time home buyer”?

In order to qualify for the first-time homebuyer LTT refund, the following criteria must be met :

  • You must be at least 18 years of age.
  • You must occupy the eligible home as your principal residence within nine months of the conveyance.
  • You cannot have owned a home or an interest in a home anywhere in the world.
    • If you have a spouse, your spouse cannot have owned a home or an ownership interest in a home anywhere in the world while he or she was your spouse. If this is the case, no LTT refund will be available for either spouse.
  • You must be a Canadian citizen or a permanent resident of Canada. If you would otherwise be eligible for the refund but are not a Canadian citizen or permanent resident at the time of the conveyance, you have 18 months following the date of the registration to apply for the LTT refund upon becoming a Canadian citizen or a permanent resident of Canada.
  • If you would otherwise be eligible for the LTT refund, but your spouse is not a Canadian citizen or permanent resident of Canada, but otherwise would be eligible to claim the maximum refund amount, you have 18 months following the date of the registration to apply for the LTT refund upon your spouse becoming a Canadian citizen or a permanent resident of Canada.

 

Hopefully our overview of the LTT refund has been helpful in assisting you with your big purchase! If you require further assistance, feel free to contact the Kormans LLP legal team and we will be happy to assist you with your first real estate purchase!

 

 

 

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