Land Transfer Tax applies to all transfers of land in Ontario.
First-time homebuyers may be eligible for a refund of all or part of the tax.
- For agreements of purchase and sale entered into before December 14, 2007, the refund only applies on the purchase of a newly constructed home.
- For agreements of purchase and sale entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.
How much is the Refund?
The maximum amount of the refund is $2,000. If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Revenue. No interest is paid on this refund.
To claim a refund, you:
- must be at least 18 years of age;
- must occupy the home as your principal residence within 9 months of after the date of transfer; and
- cannot have owned a home, or an interest in a home, anywhere in the world.
- your spouse cannot have owned a home, or an interest in a home, anywhere in the world while being your spouse; and
- in the case of a newly constructed home, you must be entitled to a Tarion New Home Warranty.
In general, if you buy land or an interest in land in Ontario, you must pay Ontario's land transfer tax, whether or not the transfer is registered at one of Ontario's land registry office.
Land includes any buildings, buildings to be constructed, and fixtures (such as light fixtures, built-in appliances and cabinetry).
Land transfer tax is normally based on the amount paid for the land, in addition to the amount remaining on any mortgage or debt assumed as part of the arrangement to buy the land.
In some cases, land transfer tax is based on the fair market value of the land, for example, where:
- a lease can exceed 50 years;
- land is transferred from a corporation to one of its shareholders; or
- land is transferred to a corporation, if shares of the corporation are issued.
How Do I Apply?
Qualifying taxpayers may claim an immediate refund at time of registration in one of two ways:
What is the application deadline?
- Applications for a refund must be made within 18 months after the date of the transfer.
If application was not made at registration and the tax was paid, qualified purchasers may apply for a refund by completing an Ontario Land Transfer Tax Refund Affidavit For First-Time Purchasers of Eligible Homes and send it to the ministry.
For full details on the refund program, please see Ontario Tax Bulletin
LTT 1-2008 Land Transfer Tax Refunds for First-Time Homebuyers.
For more information call Mike Tokmak at 416-436-0299
www.miketokmak.com www.squareonecondosandhomes.com www.torontolakeshorecondos.com