Heer Legal takes a comprehensive approach to working with first-time home buyers to ensure that they are well informed about what to expect over the course of their first real estate transaction. This can involve reviewing your agreement of purchase and sale, advising you about different types of insurance, ensuring you get eligible rebates, and explaining your closing costs and expectations on the date of your closing.

We offer a free consultation to those looking to take their first step on the property ladder.

Land Transfer Tax Refunds for First-Time Homebuyers

When you purchase land or an interest in land in Ontario, you are required to pay a land transfer tax. Oftentimes, first-time homebuyers only budget for the purchase price of the property they are acquiring, as they are unaware that all conveyances of land in the province are subject to land transfer tax. This results in them being caught off-guard and scrambling at the eleventh hour to ensure they have enough funds to pay the tax.

Fortunately, as a first-time homebuyer, you may be eligible for a refund of all or part of the tax payable. As of December 13, 2007, the refund applies to all homes, whether newly constructed
or resale. To qualify:

1. You must be at least 18 years of age;
2. You must be a Canadian citizen or Permanent Resident of Canada;
3. You must occupy the home as your principal residence within nine months of the date of transfer; and,
4. You cannot have owned a home or an interest in a home anywhere in the world, and your spouse cannot have owned a home or interest in a home, anywhere in the world while they were your spouse.

Previous ownership in a home means you do not qualify for the land transfer tax first-time homebuyer’s refund. The method of acquiring the home (e.g., purchase, gift, or through an inheritance) is irrelevant.

How much money could I receive?

As of January 1, 2017, the maximum amount of the refund is $4,000. The increased limit of $4,000 (from $2,000 in the past) applies only to conveyances or dispositions that occur on or after January 1, 2017, irrespective of when the agreement of purchase and sale was signed.

Accordingly, as of January 1, 2017, no land transfer tax would be payable by qualifying first-time purchasers on the first $368,000 of the value of the consideration for eligible homes. First time purchasers of homes greater than $368,000 would receive a maximum refund of $4,000.

Time limit to apply for a refund

A qualifying purchaser must apply for the refund within 18 months after the date of registration of the conveyance or the date the unregistered disposition occurs.

Similarly, purchasers who would otherwise be eligible for a refund, but who are not Canadian citizens or permanent residents of Canada when the transaction closes, have 18 months following registration to become eligible. Upon obtaining Canadian citizenship or permanent resident status, these purchasers may apply for the refund within the 18month period following registration of the conveyance or the date the unregistered disposition occurs.

Contact us for more information about applying for the First-Time Homebuyer’s refund.