Quite a lot of you have also been asking about Land Transfer Tax (LTT), and what it means for first time home purchasers. Thanks to Revenue Canada, here is some information for you:
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.
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:
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.
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.
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