A provincial land transfer tax applies to all properties in Ontario, including Toronto. A separate Toronto land transfer tax applies to Toronto properties only
Provincial Land Transfer Tax
(Applies to all Ontario properties, including Toronto)
0.5% on the first $55,000
plus 1.0% of the amount from $55,001 to $250,000
plus 1.5% of the amount in excess of $250,001 to $400,000
plus 2.0% of the amount in excess of $400,000
Toronto Land Transfer Tax
(Applies to Toronto properties only)
0.5% on the first $55,000
plus 1.0% of the amount from $55,001 to $400,000
plus 2.0% of the amount in excess of $400,000
First time home buyers of new AND re-sale homes will receive a rebate of the Toronto land transfer tax of up to $3,725 (this equals a 100% rebate on homes purchased for up to $400,000). Teranet will be collecting the Toronto land transfer tax for the City of Toronto. Once the City's rebate policies are reflected in Teranet's collection system, the rebate-eligible amount will be exempt at the time of registration.
According to the City, purchasers who are eligible for a FULL rebate of the Toronto land transfer tax will not have to pay the tax (meaning that they do not have to pay the tax upfront and be rebated later). This means that first-time home buyers where the total Toronto land transfer tax is $3,725 (the Toronto land transfer tax payable on a home purchased for $400,000) or less, will not pay Toronto land transfer tax
First-time home buyers with Toronto land transfer tax payable above the maximum rebate amount of $3,725 (those purchasing homes above $400,000) will be required to pay the total Toronto land transfer tax, and then receive the maximum rebate of $3,725 at a later date from the City. Once all changes have been made to Teranet's collection system, in the spring of 2008, these buyers will only have to pay the balance of the Toronto land transfer tax above $3,725.
According to the City of Toronto, eligibility rules for the Toronto Land Transfer Tax first-time buyer rebate will mirror provincial rules, as follows:
- The purchaser must be at least 18 years of age.
- 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. Note: If a purchaser's spouse owned an interest in a home BEFORE becoming the purchaser's spouse, but not while the purchaser's spouse, the purchaser may be eligible for some rebate.
- First-time buyers of BOTH re-sale, and newly constructed homes, will be eligible for a rebate of the provincial land transfer tax of up to $2,000.
- Effective for first-time buyers who enter into Agreements of Purchase and Sale AFTER December 13, 2007.
- This change is being implemented by provincial legislation introduced on December 13, 2007. The Ministry of Finance has indicated that, until the legislation is passed, first-time buyers of re-sale properties eligible for the rebate can submit their applications for the refund and they will be processed once the legislation has passed. It is not known when the legislation will be passed. Buyers can consult with their lawyers if they have concerns.
- The provincial land transfer tax rebate applies in all Ontario municipalities. In Toronto, the provincial rebate is in addition to City rebates of the Toronto Land Transfer Tax.
