There is a lot to consider when buying a home but one thing that comes up again & again when talking with our clients is the confusion surrounding the Land Transfer Tax in Ontario.
This week’s post is all about simplifying the process so you understand exactly what it is & how it affects you!
• Details Of The Land Transfer Tax •
Below is the table of how the tax is calculated based on the purchase price (price you agree to pay the seller for their home)
0.5% – $1 – $55,000
1% – $55,001 – $250,000
1.5% – $250,001 – $400,000
2% – $400,001+
• What is The Land Transfer Tax? •
When you purchase land (which can be a home, condo, co-op, duplex, etc.) in Ontario you will need to pay a tax based on the value of the property on the day title transfers into your name.
To simplify this a bit more… you (the buyer) pay a tax on the price you pay for a home in Ontario on the closing day.
• Who Pays the Ontario Land Transfer Tax? •
Whoever is buying the property is responsible for paying the provincial tax.
• What About Toronto’s Municipal Land Transfer Tax? •
This is a tax unique to the city of Toronto… buyers who are purchasing a home within Toronto’s boundaries are required to pay an additional Land Transfer Tax to the city. This essentially doubles the taxes you would pay when buying.
• First Time Buyer Exemption •
If you are buying a property for the first time you might be eligible for the First Time Home Buyers Exemption program.
This exemption was put in place by the provincial government to assist first time buyers to get into home ownership by rebating the tax up to $5,000.
• Who Is Eligible for the First Time Exemption? •
•must be at least 18 years old
•must occupy the home as your principal place
of residence within 9 months of the closing date
•you (or your spouse) cannot have previously owned
or had an interest in a home anywhere in the world
• How To Claim Rebate •
You will have 18 months from closing to process your rebate but most buyers claim their refund on their closing date through their lawyer who will complete the statements required.
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Real Estate is very localized & while your process will be similar to this, we cannot guarantee that transactions progress exactly as written here. Feel free to reach out & ask us any questions you may have. If we aren’t your local REALTORS® we are connected to a vast network of real estate agents across the country & are always glad to help you connect with someone in your market.
Keeping it Genuine,