What is the land transfer tax for a first-time home buyer?
As a first-time home buyer you are eligible for a few benefits, including a refund on your land transfer tax. Land transfer tax is the tax a buyer must pay on the land as soon as ownership is transferred over to them. Basically, it is 0.5% for the first $55,000, 1% for anything above $55,000 and below $250,000, and 1.5% for any amount above $250,000.
It is possible to get an immediate refund as soon as you transfer the property to your name if it is done electronically or by filling out an Ontario Land Transfer Tax Refund Affidavit for First Time Purchasers of Eligible Homes at the Land Registry Office. It can then be used to offset the land transfer tax, which means a lower payment. If it is not claimed at registration then the full tax must be paid and will be refunded once a claim is sent.
As of January 1, 2017, first-time home buyers are eligible for a maximum refund of $4,000. Before this date the maximum was $2000. Plus, no land transfer tax is payable on the first $368,000 of the value of the home. Home purchases that are greater than $368,000 will receive the maximum $4,000 refund. This is great news for first-time home buyers and hopefully it encourages more renters to purchase their first home.
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