Land Transfer Tax Refund for First-time Homebuyers

Land Transfer Tax Refund for First-time Homebuyers - Courtesy of: Ontario Ministry of Finance

http://www.fin.gov.on.ca/en/refund/newhome/index.html

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 transfers where:

  • the agreement of purchase and sale was entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.
  • the agreement of purchase and sale was entered into before December 14, 2007, the refund only applies on the purchase of a newly constructed home.

Applications for a refund must be made within 18 months after the date of the transfer.

 
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How much is the LTT 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 Finance. No interest is paid on this refund.

Who qualifies?

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 the date of transfer; and
  • cannot have ever owned a home, or an interest in a home, anywhere in the world.

In addition:

  • 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, where the agreement of purchase and sale was entered into before December 14, 2007, you must be entitled to a Tarion New Home Warranty.

How do I apply?

Qualifying taxpayers may claim an immediate refund at time of registration in one of two ways:

Refunds claimed at the Ministry of Finance

Where a qualifying taxpayer does not claim the refund at registration, the tax will be payable at the time of registration and a refund claim may be made directly to the Ministry of Finance. The following documentation must be submitted, in order for a refund claim to be processed by the Ministry of Finance:

  • 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;
  • A copy of a document that provides proof of occupancy of the home, such as copies of telephone/cable bills, 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.

The application and any refund payment are subject to audit by the Ministry of Finance. Charges may be laid and fines result where a person obtains or attempts to obtain a refund by deceit, falsehood or any fraudulent means.

Harmonized Sales Tax

On July 1, 2010, Ontario introduced a federally administered Harmonized Sales Tax (HST) that applies to most purchases and transactions.

The HST applies to newly constructed or substantially renovated homes, but does not apply to resale homes. Buyers of new homes will receive a rebate of the provincial portion of the HST up to $24,000 regardless of the price of the new home.

The Ontario new housing rebate is available for the same types of residential properties for which the GST new housing rebate is available.

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