Land Transfer Tax
The Province is proposing to modernize Ontario’s Land Transfer Tax (LTT) system to reflect developments in the real estate market, by:
- Enhancing support for first-time homebuyers;
- Updating LTT rates and brackets; and
- Restricting the refund for first-time homebuyers to Canadian citizens and permanent residents.
Doubling the Maximum Refund for First-Time Homebuyers
To help Ontarians buy their first home, the Province is proposing to double the maximum refund for first-time homebuyers from $2,000 to $4,000, effective January 1, 2017.
Currently, no LTT is payable on the first $227,500 of the value of consideration for a first home. The value of consideration for residential properties is typically the purchase price of the property and is the amount used for calculating LTT payable.
With the increased maximum, no LTT would be payable by qualifying purchasers on the first $368,000 of the value of consideration for eligible homes, an increase of over $140,000 from the current level. First-time purchasers of homes for greater than $368,000 would receive a maximum refund of $4,000. As a result of this change, it is estimated that more than half of first-time homebuyers would pay no LTT.
For example, a qualifying purchaser of a $350,000 home currently pays $1,725 in LTT (including the current maximum refund). Beginning January 1, 2017, this would decline to zero.
First-time purchasers of more expensive homes would also benefit from the enhanced refund. For example, a qualifying purchaser of a $600,000 home currently pays $6,475 in LTT (including the current maximum refund). Beginning January 1, 2017, this would decline to $4,475, a savings of $2,000.
For further information on modernizing land transfer tax and other tax measures, visit http://bit.ly/2g1WkOv