From: http://www.rev.gov.on.ca/en/refund/newhome/index.html
Land Transfer Tax Refund for First-time Homebuyers
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.
Applications for a refund must be made within 18 months after the date of the transfer.
From: http://www.assignmentscanada.ca/buyingincanada.html
Property Transfer (or Purchase) Tax / Land Transfer Fees are calculated between 0.5-2% of the property's total value (not applicable in Alberta, rural Nova Scotia or Saskatchewan). They are generally 1% of the first $200,000 of the value and 2% of the remainder.
Since the 2005 Provincial Budget, Property Transfer Tax (PTT) is now exempt for individuals buying their first home as long as they meet certain criteria, namely that they are a Canadian citizen or Permanent Resident and have never owned a home anywhere in the world; that they have lived in the province for at least one year prior to purchase; that they have filed two Canadian tax returns within the last six years; and that they must occupy the property as their principal residence for the first year of ownership. There are also proportional exemptions to PTT for first-time home buyers which vary by region based on the fair market value of the property.
As of December 2007, the Ontario Provincial Land Transfer Tax exemption for first time buyers (up to $2,000) now applies to resale as well as newly constructed homes. Similarly, from February 2008, Toronto (and this may spread to other provincial cities) has its own Land Transfer Tax which allows first time home buyers of both new and resale homes to qualify for a rebate.
If the property is vacant land, the house must be constructed within one year of closing and the buyer must live in the house for the balance of the year.
There are other criteria needed as well to qualify for the PTT exemption, so it is best to consult a lawyer or notary.
From: http://www.taxpage.com/topten.htm
The Ontario Ministry of Finance has recently published a Land Transfer Tax Bulletin entitled “Determining the Value of the Consideration for Transfers of New Homes, Land Transfer Tax Act”. The Bulletin contains information on how to calculate the value of consideration in the purchase of a newly constructed home and indicates that in certain circumstances the value of extras, are to be included in determining the value of consideration. The Bulletin may be obtained from the Ontario Government, Ministry of Finance.
From: http://www.margaretu.com/Government_Incentives/page_1693351.html
Land Transfer Tax Refunds for First-Time Homebuyers
Land transfer tax applies to all conveyances of land in Ontario. First-time homebuyers may be eligible for a refund of all or part of the tax payable.
- 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.
The amount of the refund claimed will, if granted, offset the land transfer tax payable. The maximum amount refundable is $2,000.
Examples:
| Cost of Home | Tax Payable | Tax Refund | Net Tax Payable |
| $100,000 | $725 | $725 | $0 |
| $200,000 | $1,725 | $1,725 | $0 |
| $300,000 | $2,975 | $2,000 | $975 |
There is no interest paid on this refund.
Limitations
The refund will be reduced if one or more of the purchasers are not a first-time home purchaser. The refund will be proportionate to the interest acquired by the individuals who qualify for the refund.
For example, where a parent who is not a first-time purchaser and a child who is a first-time purchaser, purchase a home with equal 50/50 interests, the child may claim 50% of the land transfer tax refund. The child's claim cannot exceed 50% of the maximum allowable refund (i.e. 50% of $2,000).
A qualifying purchaser may also 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 that purchaser's spouse.
From: http://www.rev.gov.on.ca/en/BULLETINS/LTT/1_2008.html
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Land Transfer Tax Refunds For First-Time Homebuyers
Tax Bulletin LTT 1-2008
Published date: June 2008
Download PDF
- This bulletin sets out the requirements to qualify for and the procedures to apply for a refund of land transfer tax on the purchase of a qualifying home by a first-time purchaser. Under certain circumstances this refund applies on the purchase of either a newly constructed home or a resale.
- This bulletin replaces the Ontario Tax Bulletin LTT 4-2003 relating to the refund program for first-time purchasers of newly constructed homes.
- This bulletin provides general information. It is not exhaustive and should not be considered as a substitute for the Land Transfer Tax Act (Act) and its regulations.
General
Land transfer tax applies to all conveyances of land in Ontario. First-time homebuyers may be eligible for a refund of all or part of the tax payable.
- 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.
Qualifying taxpayers may claim an immediate refund at time of registration as follows:
If the refund is not claimed at registration, the tax must be paid and a claim for the refund may be submitted directly to the Ministry of Revenue at the address at the end of this bulletin.
Amount of Refund
The amount of the refund claimed will, if granted, offset the land transfer tax payable. The maximum amount refundable is $2,000.
Examples:
| Cost of Home | Tax Payable | Tax Refund | Net Tax Payable |
| $100,000 | $725 | $725 | $0 |
| $200,000 | $1,725 | $1,725 | $0 |
| $300,000 | $2,975 | $2,000 | $975 |
There is no interest paid on this refund.
Limitation
The refund will be reduced if one or more of the purchasers are not a first-time home purchaser. The refund will be proportionate to the interest acquired by the individuals who qualify for the refund.
For example, where a parent who is not a first-time purchaser and a child who is a first-time purchaser, purchase a home with equal 50/50 interests, the child may claim 50% of the land transfer tax refund. The child's claim cannot exceed 50% of the maximum allowable refund (i.e. 50% of $2,000).
A qualifying purchaser may also 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 that purchaser's spouse.
Application Form
If registering on paper or if claiming a refund through the Ministry of Revenue, after having paid the tax on registration, a qualifying purchaser must complete an Ontario Land Transfer Tax Refund Affidavit For First-Time Purchasers of Eligible Homes form in order to apply for the refund.
Definitions
"qualifying home" means,
- for agreements of purchase and sale entered into before December 14, 2007, a newly constructed home, and
- for agreements of purchase and sale entered into after December 13, 2007, an eligible home.
"eligible home" is defined as follows:
- a detached house;
- a semi-detached house, including a dwelling house that is joined to another dwelling house at the footing or foundation by a wall above or below grade or both above and below grade;
- a townhouse;
- a share or shares of the capital stock of a co-operative corporation if the share or shares are acquired for the purpose of acquiring the right to in-habit a housing unit owned by the corporation;
- a mobile home that complies with the Canadian Standards Association Standard CAN/CSA-Z240 Mobile Homes and is suitable for year round permanent residential occupation;
- a condominium unit;
- a residential dwelling that is a duplex, triplex or fourplex;
- a partial ownership interest as a tenant in common of real property if the ownership interest was acquired for the purpose of acquiring the right to inhabit a housing unit forming part of the real property;
- a manufactured home that is manufactured in whole or in part at an offsite location, that is intended for basement installation, that is suitable for year round permanent residential occupation and that complies with,
- the Building Code made under the Building Code Act, 1992;
- if the manufactured home is constructed in sections that are not wider than 4.3 metres, Canadian Standards Association Standard Z240.2.1 Structural Requirements for Mobile Homes and Canadian Standards Association Standard Z240.8.1 Windows for Use in Mobile Homes; or
- if the manufactured home is constructed in sections that are 4.3 metres or wider, Canadian Standards Association Standard A277 Procedure for Certification of Factory Built Houses, or
- any other residential property as may be prescribed.
"newly constructed home" means a home in respect of which the purchaser is entitled to a warranty under section 13 of the Ontario New Home Warranties Plan Act (ONHWPA) and which is sold to the purchaser by a vendor as defined in ONHWPA.
"purchaser" means an individual who is at least 18 years of age and who has never owned an eligible home anywhere in the world and whose spouse has not owned an eligible home anywhere in the world while he or she was a spouse of the individual.
"spouse" means spouse as defined in section 29 of the Family Law Act. At present, "spouse" means either of two persons who are married to each other, or who are not married to each other and who have cohabited,
- continuously for a period of not less than three years, or
- in a relationship of some permanence, if they are the natural or adoptive parents of a child.
Requirements to Qualify for a Refund
Eligibility Requirements
- The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.
- The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
- If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world, while he or she was the purchaser's spouse. If this is the case, no refund is available to either spouse.
- The purchaser cannot have previously received an Ontario Home Ownership Savings Plan (OHOSP)-based refund of land transfer tax.
Time Limit to Apply for Refund
A qualifying purchaser must apply for the refund no later than 18 months after the date of registration of the conveyance or the date the unregistered disposition occurs.
Procedures to Apply for the Refund
Electronic Registration
In the electronic land registration system, the refund may be claimed by selecting the appropriate electronic statements located under the Explanation tab of the land transfer tax section. Statement 9028 or 9029 (whichever is applicable) must be completed.
As well the following statements must be completed:
9127 and
9128 or (9129 and either 9130 or 9131) and
9132 and
In addition, for agreements of purchase and sale entered in prior to December 14, 2007 where the home purchased must be a newly constructed home, the following statement must be completed:
9133
Statements 9028, 9029, 9127, 9131, 9132 and 9133 require additional information to be entered. The wording of these electronic statements is as follows:
9028
Fraction of parties who are qualifying home purchasers: ALL OR FRACTION (N/D) and the agreement of purchase and sale was entered into before December 14, 2007.
9029
Fraction of parties who are qualifying home purchasers: ALL OR FRACTION (N/D) and the agreement of purchase and sale was entered into after December 13, 2007.
9127
NAMES(S) is/are (a) first-time home purchaser(s) as defined in the Land Transfer Tax Act and
9128
None of the purchaser(s) is/are a "spouse" as defined in section 29 of the Family Law Act.
9129
The purchaser(s) has/have (a) "spouse(s)" as defined in section 29 of the Family Law Act and
9130
(a) the spouse(s) has/have never owned an eligible home
9131
(b) The spouse(s) NAME(S) previously owned an eligible home at ADDRESS, but sold it on YYYY/MM/DD (Note: In order to qualify for a refund, any spouse must have sold any eligible home prior to becoming the spouse of the first-time purchaser)
9132
The purchaser(s) will occupy the qualifying home as his/her/their principal residence on YYYY/MM/DD (Note: must be within 9 months of the date of registration or disposition), and
9133
Where the qualifying home is a "newly-constructed home" in respect of which the purchasers are entitled to a warranty under the Ontario New Home Warranties Plan Act, the registration number for the builder of the newly constructed home is NUMBER.
Refunds Claimed at Land Registry Office
For paper registrations, qualifying taxpayers or their solicitors may claim an immediate refund at the time of registration by filing the Ontario Land Transfer Tax Refund Affidavit For First-Time Purchasers of Eligible Homes along with their Transfer/Deed and Land Transfer Tax Affidavit at a Land Registry Office.
Refunds Claimed at the Ministry of Revenue
Where a qualifying taxpayer is unable to claim the refund at registration, the tax will be payable at that time and a refund claim may be made directly to the Ministry of Revenue, at the address at the end of this bulletin. The following documentation must be submitted in order for a refund claim to be processed:
- A properly completed form – Ontario Land Transfer Tax Refund Affidavit For First-Time Purchasers of Eligible Homes ;
- A copy of the registered conveyance (transfer/deed). If not registered electronically, this should be a photocopy of the Land Registry Office's original which shows the tax paid;
- A copy of the docket summary will also be required if the conveyance was registered electronically;
- A copy of the agreement of purchase and sale, together with all schedules, amendments and assignments along with a copy of the statement of adjustments relating to the conveyance;
- Proof of occupancy, with the new address listed, such as copies of telephone/cable bills, credit card statements, driver's licence, newspaper/magazine subscriptions, etc., and
- For agreements of purchase and sale entered into before December 14, 2007, a copy of the Tarion New Home Warranty, which is also known as the Certificate of Completion and Possession.
Additional Information
If this bulletin does not completely address your particular situation, refer to the Act and related regulations, or contact the:
Ministry of Revenue
Tax Compliance Branch
Land Resources and Taxes Section
33 King Street West, PO Box 625
Oshawa ON L1H 8H9
Toll-free: 1 866 ONT-TAXS (1 866 668-8297)
Fax: 905 433-5770
Teletypewriter (TTY): 1 800 263-7776
This publication and various other English and French tax bulletins published by the Ministry of Revenue may be obtained online at ontario.ca/revenue.
The Land Transfer Tax Act and Ontario's other public statutes and regulations are also available online at ontario.ca/e-laws.
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Notices
- Last Modified: Friday, September 18, 2009
From: http://www.homelegalcost.com/lttrefund.asp
| ONTARIO LAND TRANSFER TAX REFUND |
| A) FIRST TIME BUYER BUYING FROM A BUILDER
Important information about the Ontario Land Transfer Tax Refund: Effective April 1, 2000, the Ontario Land Transfer Tax Act was amended making the refund to eligible first-time purchasers of newly constructed homes permanent so that it is no longer necessary (as it was in past years) to be concerned with annual renewals of the program.
NOTE: On December 13, 2007, the Ontario government's mini budget announced that first time buyer Ontario land transfer tax refund (up to $2,000.00) will also be extended to resale homes provided that the offer was accepted on or after December 14, 2007: See below, section B, FIRST TIME BUYER BUYING A RESALE HOME.
FIRST TIME BUYER OF NEW HOME: You must be a first-time home buyer of a newly constructed home or condominium registered with the Ontario New Home Warranty Program (ONHWP). Condo conversions (from older buildings) do NOT qualify! Your Agreement must have been accepted by the builder on or after May 8, 1996 and you must use the home as your principal residence.
NEVER OWNED A HOME: You (or your spouse) must be at least 18 years of age and never owned an interest in a home anywhere in the world (since you became spouses). Spouse includes a common-law spouse of three (3) years or more or where there is a natural or adoptive child between the common-law spouses. If, since becoming spouses, both spouses did not own a home, but one spouse owned a house which was sold prior to marriage (resulting in such spouse who did own a home being disqualified as a first-time buyer), the remaining first-time buyer spouse may claim total available refund (even if both spouses take title).
PARTNERSHIP PURCHASE (NON-SPOUSAL): If father and son buy a home (or any two non spouses) and one (only) is a first-time buyer with a 50% interest (for example), such first-time buyer can claim a refund of 50% of the Ontario Land Transfer Tax refund available being half of $2,000.00.
MAXIMUM REFUND: If your Agreement with the builder was entered into:
i. on or before March 31, 1999, maximum refund is $1,725.00;
ii. on or after April 1, 1999, maximum refund is $2,000.00.
INSTANT REFUND:
a). The refund is instantly available on closing of the real estate purchase. Any amount of Ontario land transfer tax above the allowed maximum refund must be paid on closing.
b) . Where a qualifying purchaser did not claim an immediate refund at time of a purchase closing, the tax will be payable at that time and a refund claim may be made directly to the Ministry of Finance. This application must be made within eighteen months of registration of the conveyance and no interest is payable on this refund. The following documentation must be submitted in order for a refund claim to be processed (if claim for refund was not made by purchaser's lawyer, for the purchaser, at the time of closing):
1. A properly completed Ontario Land Transfer Tax Refund Affidavit form,
2. Copy of the registered transfer/deed,
3. Copy of the agreement of purchase and sale,
4. Copy of the statement of adjustments at time of completion of purchase,
5. Copy of the Tarion New Home Warranty Certificate. B) FIRST TIME BUYER BUYING A RESALE HOME
In addition to first time buyers (who buy from a builder) being entitled to a land transfer tax refund of up to $2,000.00, first time buyers of resale homes will also now be eligible for a rebate of Ontario Land Transfer Tax of up to $2,000.00 on any resale home purchased in Ontario where the agreement of purchase and sale is entered on or after December 14, 2007. As of August /08, the refund is instantly available on the closing date.
Eligibility requirements for resale homes, is the same as for new builder homes:
- Purchaser must be 18 years or older
- Must use property as principal residence within 9 months of closing
- The spouse of the first time buyer must not have owned any residential property anywhere in the world during the marriage |
From: http://www.bdale.com/RRSP.htm
Help for First Time Home Buyers
RRSP Program
If you are a first time buyer, and have assets invested in an RRSP, you can withdraw up to $20,000 to apply towards the purchase of a home. You are considered a first time home buyer if you have not lived in a home owned by yourself or your spouse in the last five years.
In addition to being a first time home buyer, you must have entered into a written agreement to buy or build a home and intend to occupy that home as a principal residence. Any funds you wish to withdraw under the program must have been in your RRSP for at least 90 days. If you have less than $20,000 in an RRSP, its not too late to save money. You can make a contribution to your RRSP early in the year before the RRSP deadline. You can then receive a tax refund and 90 days later withdraw the RRSP contribution for use in buying a home.
Once you have applied the RRSP funds to the purchase of your home, you are required to pay back the RRSP over 15 years. Ordinarily, you will deposit 1/15 of the amount withdrawn back into your RRSP in each of the 15 years following your home purchase. If you fail to repay an amount required in any given year, then that amount will be included in your taxable income for the year.
OHOSP Program
In addition to withdrawing RRSP funds, the Ontario government has established the Ontario Home Ownership Savings Plan (OHOSP) which provides a tax credit for contributions of up to $2,000 per year to the plan. In order to qualify, you must be earning under $40,000 per year, or have combined spousal incomes of less than $80,000 per year. Once you have signed an agreement of purchase and sale for a home, your bank will release the funds to your solicitor to be applied toward the purchase. If your plan was set up prior to January 1, 1994 and the purchase price of your home is less than $200,000 you may also receive a refund of all or part of the Land Transfer Tax payable on the purchase. This does not apply to OHOSPs set up since 1994.
Land Transfer Tax Refund for First Time Home Buyers of New Homes
First time home buyers entering into an agreement to buy newly constructed homes between May 8, 1996 and March 31, 2001 are eligible for an instant refund of their Land Transfer Tax paid up to $1,725 (or $2,000 for agreements executed after March 31, 1999) per home. For this program a first time buyer is a buyer at least 18 years old who has not owned an interest in a home anywhere in the world, and whose spouse has also not owned an interest in a home anywhere in the world while he or she was married to the home buyer.
If you are a first time buyer, but your spouse owned a home before you were married, you will generally qualify for half the rebate. If, however, your spouse owned a home, even in his or her name only, while you were married, you are disqualified from claiming the rebate. You will be disqualified even if you are a common law spouse under the Family Law Act. That definition applies if you were living together for three years, or for a lesser time if you have a child together.
In order to qualify, a first time buyer must enter into an Agreement of Purchase and Sale for a new home between May 8, 1996 and March 31, 2000 and register the conveyance at a Land Registry Office by December 31, 2000. In the case of a condominium, however, you will be eligible for the refund if your interim closing and occupation takes place by December 31, 2000 provided that your final closing occurs no later than December 31, 2001.
The New Home Buyers Land Transfer Tax refund is not available to buyers claiming a Land Transfer Tax refund under an OHOSP plan. A buyer who qualifies for both programs will have to decide which refund to claim. Generally, if you are buying a newly constructed home within the required dates, you are better off claiming the new home buyers refund than the OHOSP refund.
NOTE: The recently announced extension to the Land Transfer Tax Program has not yet been passed into law, so for buyers who signed agreements after March 31, 2000 they must pay the tax and apply for a refund which will be granted after the legislation is passed.
If you have any more questions, or require a lawyer for the purchase of a home contact Bryan Dale today!
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