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Toronto Land Transfer Tax Refunds for First-Time Homebuyers

Updated Tuesday, July 3, 2012  ::  Views (9376)


Provincial Land Transfer Tax Refunds 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 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.


How It Works

Qualifying taxpayers may claim an immediate refund at time of registration as follows:

  • If registering electronically, by completing the required statements under the Explanation tab of the electronic land transfer tax affidavit, or
  • If registering on paper, by filing an Ontario Land Transfer Tax Refund Affidavit For First-Time Purchasers of Eligible Homes at the Land Registry Office.
  • 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.

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


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 $1725 $1725 $0
$300,000 $2975 $2000 $975
There is no interest paid on this refund.


Who Is Eligible

First-time homebuyers are eligible. 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. 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.


How to Find Out More

For more information, please visit the Ministry of Revenue website.


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