First Time Home Buyers and Land Transfer Tax

When it comes to purchasing a home, the costs can easily pile up and therefore they need to be carefully considered. Land transfer tax is one of these costs, which is essentially a tax paid to the government of Ontario every time a property is purchased.

In the City of Toronto in addition to the Provincial Land Transfer Tax purchasers of a property must also pay the Municipal Land Transfer Tax to the City. The amount of tax payable depends on the region and the price of the property being purchased. To determine the amount of tax payable by you, a real estate lawyer in Mississauga can be of your assistance.

First time home buyers who qualify may be eligible to receive a partial or full refund of the land transfer tax that they pay on their property. To apply you must be at least 18 years old and this must be your first time buying a home which means that you cannot have owned or have had an interest in a home anywhere in the world prior to this.

This same rule also applies to your spouse and as a result if she/he had previous ownership or interest in a home while she/he was your spouse you will be disqualified from receiving a first-time home buyer, land transfer tax refund.

In addition, you must be a Canadian Citizen, or a permanent resident of Canada and you must occupy the property as your principal residence within nine months of the date of the transfer. If you meet the criteria, you may qualify for a maximum refund amount of $4000 in Provincial Land Transfer Tax and $4475 in Municipal Land Transfer Tax for those who purchase property in the City of Toronto.

If one of the purchasing parties is not a first-time home buyer and the other one is, the refund will be calculated according to the ownership interest of the party who does qualify for the refund. Please consult with a real estate lawyer in Mississauga so you can receive guidance through the process.