What is a Land Transfer Tax?
The Land Transfer Tax is charged by the provincial government’s Ministry of Finance whenever a person buys or acquires an interest in a piece of land in Ontario, except in a few special circumstances. The tax applies to every method of conveying land ownership, whether the land is purchased, gifted, or obtained through other means.
What is a Land Transfer Tax Refund for first-time homebuyers?
The Land Transfer Tax Refund for first-time homebuyers is a refund of all or part of the Land Transfer Tax, up to a maximum of $4000. It is available to people who meet the following criteria:
The purchaser is at least 18 years old.
The purchaser is a permanent resident of Canada.
The purchaser is occupying the home as their primary residence within 9 months of the date of the land transfer.
The purchaser applies for the refund within 18 months of the date of the registration of the conveyance.
The purchaser has never before owned a home, or an interest in land, anywhere in the world, at any time. If a married couple is purchasing a home, and only one of the people in the couple is a first-time homebuyer, the couple is generally not eligible for the refund, unless the person who has owned a home did not own it while the couple was married.
What kinds of homes are eligible?
Eligible homes are:
A manufactured home that is manufactured in whole or in part at an offsite location, that is intended for basement installation, that is suitable for year round permanent residential occupation and that complies with,
The Building Code made under the Building Code Act, 1992;
If the manufactured home is constructed in sections that are not wider than 4.3 metres, Canadian Standards Association Standard Z240.2.1 Structural Requirements for Mobile Homes and Canadian Standards Association Standard Z240.8.1 Windows for Use in Mobile Homes; or
If the manufactured home is constructed in sections that are 4.3 metres or wider, Canadian Standards Association Standard A277 Procedure for Certification of Factory Built Houses, or
Any other residential property as may be prescribed.
A detached house;
A semi-detached house, including a dwelling house that is joined to another dwelling house at the footing or foundation by a wall above or below grade or both above and below grade;
A townhouse;
A share or shares of the capital stock of a co-operative corporation if the share or shares are acquired for the purpose of acquiring the right to in-habit a housing unit owned by the corporation;
A mobile home that complies with the Canadian Standards Association Standard CAN/CSA-Z240 Mobile Homes and is suitable for year round permanent residential occupation;
A condominium unit;
A residential dwelling that is a duplex, triplex or fourplex;
A partial ownership interest as a tenant in common of real property if the ownership interest was acquired for the purpose of acquiring the right to inhabit a housing unit forming part of the real property;
How can I get the Land Transfer Tax Refund for first-time homebuyers?
The Ontario Ministry of Finance requires an application to approve the Land Transfer Tax Refund for first-time homebuyers. The lawyer working on a purchaser’s home purchase file can claim the refund for them through the registration process. Alternatively, if a purchaser cannot claim the refund at the time of the registration, the purchaser can complete an application at a later date.