You’ve signed on the dotted line and your offer was accepted. Congratulations on your new home! As you start readying your finances for closing, one of the top items that first-time home buyers forget to budget for is the land transfer tax (LTT for short).
Buyers of houses and condos in Ontario pay LTT when they purchase a property. Buyers who are purchasing a property in the City of Toronto also get to pay the Toronto LTT, on top of the Ontario LTT amount.
With rising property pricing the LTT can be significant. To give you an idea, on a $1M property in the City of Toronto, you’d be paying $32,950 in LTT. This amount is due on closing and is collected by your lawyer and remitted to the government. The LTT applies to all properties: resale or new construction.
The land transfer tax amounts are calculated on a sliding scale formula, but to make things easier, use our simple Land Transfer Tax calculator where you can plug in your purchase price and save yourself the number crunching.
There is some good news for first-time buyers. You may qualify for a rebate equal to the full amount of your LTT, up to a maximum of $4,000.
To qualify for the Ontario Land Transfer Tax Refund for First-Time Homebuyers, you must meet the following criteria:
- You must be a Canadian citizen or permanent resident of Canada,
- You must be 18 years of age or older,
- You must live in the home within 9 months of purchasing it,
- You cannot have owned a home before, and
- If you have a spouse, they cannot have owned a home during the time they have been your spouse.
If you’re planning on buying a house or condo, make sure you’ve budgeted for land transfer tax.
Important note: This article is not Legal Advice. No one should act, or refrain from acting, based solely upon the materials provided on this website, any hypertext links or other general information without first seeking appropriate legal or other professional advice.