Beginning on January 1, 2017, the maximum amount of refund available to eligible first time home buyers jumped from $2,000.00 to $4,000.00. This means that eligible homebuyers in Ontario will not pay Land Transfer Tax (LTT) on the first $368,000 of their home’s purchase price. The government has implemented this measure in an effort to assist first-time homebuyers. As part of the provincial government’s 2016 Fall Economic Statement, it was hoped that by doubling the refund, more than half of first-time homebuyers in Ontario will pay no LTT on the purchase of their first home. This change comes in the wake of a spike in property value in hot markets, like the Niagara Region, and highlights how unaffordable a home purchase has become for young buyers.
To qualify for a refund:
- the purchaser must be at least 18 years old;
- the purchaser must occupy the home as their principle residence;
- the purchaser cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, at any time;
- the purchaser cannot have previously received an Ontario Home Ownership Savings Plan (OHOSP) ‑ based refund of land transfer tax;
- the purchaser must be a permanent resident of Canada;
- and, if the purchaser has a spouse, the spouse cannot have owned an eligible home, or had any ownership interest in an eligible home, while he or she was the purchaser’s spouse.
In addition, a qualifying purchaser may claim a refund in proportion to his or her spouse’s interest if that purchaser’s spouse has owned a home before becoming the purchaser’s spouse, but not while being that purchaser’s spouse. A partner’s eligibility for a refund depends on whether you are spouses as defined in section 29 of the Family Law Act. If you are not spouses, then your partner may claim a refund based on his or her interest acquired in the home. If you are spouses, your partner may claim a refund up to the maximum refund amount applicable to your transaction (you can claim the refund for your interest and your partner’s interest), as long as you did not own a home while you were each other’s spouse.
If you need help with any of the foregoing issues, or require assistance with the purchase or sale of a home, please do not hesitate to contact one of the Real Estate Professionals at Daniel & Partners LLP today.
Blog post written by Matteson DeLuca, student-at-law.