Ontario Extends Tax Rebate to Resales
For many years, the province of Ontario has sought to provide financial assistance to first-time homebuyers with its Land Transfer Tax Refund Program. However, one of the key qualifying conditions has always been that the home being purchased be a newly constructed home.
As of December 13, 2007, the rebate program has been extended to include resale homes.
Who is eligible for the Land Transfer Tax Refund?
All first-time homebuyers are now eligible for the Land Transfer Tax refund. To be considered a first-time homebuyer, the purchaser, who must be at least 18, cannot previously have owned a home or had any ownership interest in a home, anywhere in the world.
Further, a spouse of a purchaser cannot previously have owned a home or had any ownership interest in a home, anywhere in the world. A spouse includes a common law spouse. To be considered common law spouses, the parties must have lived together continuously for a period of not less than three years, or be in a relationship of some permanence, if they are the natural or adoptive parents of a child.
If the first-time homebuyer is purchasing the home with someone other than a spouse and that other person is not a first-time homebuyer, the refund will be pro-rated.
Are there any time limitations?
For a purchaser of a resale to be eligible for a refund, the agreement of purchase and sale must have been entered into after December 13, 2007.
There is no such restriction if the home is a newly-constructed home.
Whether the purchaser is acquiring a newly-constructed home or a resale, the purchaser must occupy the home as his or her principal residence within 9 months of the closing date.
How is the refund claimed?
Although the Land Transfer Tax Refund Program has been extended to include resales, the actual amendments to the law have not yet been passed. Until the amendments are passed, purchasers of resales must continue to pay the land transfer tax at the time the deed is registered.
In addition, the purchaser must submit a refund affidavit to the Ministry of Revenue in order to be eligible to receive the refund. Refund cheques will be issued by the Ministry once the amendments come into force. The necessary forms will be provided to the purchaser by the lawyer handling the sale.
For those buying a newly-constructed home, refunds will continue to be handled as they have always been.
How much is the refund?
The maximum rebate, whether a resale or a newly constructed home, is $2,000.
Where can I get more information?
For additional information about Land Transfer Tax as well as the refund program, please contact Stan Landau or Howard Steinberg. Both Stan and Howard have many years of experience working the field of real estate law and they would be happy to assist you.