Eligibility for the Land Transfer Tax Rebate
If you are a first-time homebuyer, you may be eligible for a Land Transfer Tax Rebate of up to $2000.00. In order to qualify for this rebate, you must satisfy the following conditions:
- must be at least 18 years old
- you cannot have owned an eligible home, or an interest in an eligible home, anywhere in the world
- you must occupy the home as your principal residence – this means that the no portion of the home should be rented out or used for business purposes
- if your purchasing a new home, your home must also be eligible for the Tarion New Home Warranty by your builder
If you have a spouse, your spouse also cannot have owned or had an interest in an eligible home anywhere in the world while he/she has been your spouse. Also, if you did not obtain the tax rebate at the time of purchasing your home, you must apply for the refund within 18 months of the closing date of your home purchase. See here for more information on the Land Transfer Tax Rebate.
For the purposes of the Land Transfer Tax Rebate, a spouse is defined either a person you are married to or a person you are in a common law relationship with. There are a few criteria to determine if the person is a common law spouse for the purposes of the rebate:
- whether you have cohabited with the person for a period of at least 3 years; or
- you are in a relationship of some permanence, for example if you are the natural or adoptive parents of a child
If you are not spouses, then whichever spouse is a first-time home buyer will be entitled to obtain a Land Transfer Tax Rebate for their corresponding share in the property. For instance, if they are taking a 50% share, then they are entitled to half of the maximum Land Transfer Rebate which equals a maximum of $1000.00.
Lastly, your eligibility for a Land Transfer Tax Rebate is not dependent on how you become an owner, whether that is through a purchase or an inheritance – the deciding factor is whether you have ever owned an eligible home in the past.
How to obtain the Land Transfer Tax Rebate
During the home purchase process, your lawyer will ensure that the proper paperwork is completed to entitle you to the rebate and the appropriate deduction will be made to your closing costs.
If you did not obtain the rebate at the time of closing and paid the full land transfer tax, you can apply for refund. To do this, you must provide the following to the Ministry of Finance:
- an original copy of the Ontario Land Transfer Tax Rebate Affidavit
- a copy of the registered transfer/deed to the land
- evidence of your Land Transfer Tax payment
- a copy of the docket summary (if the transfer was registered electronically)
- a copy of the agreement of purchase and sale (including all schedules, amendments and assignments)
- a copy of the statement of adjustments from the purchase transaction
- a copy of documents showing proof of occupancy, such as copies of telephone/cable bills, driver’s licence, etc.
You must then forward your application directly to the Ministry of Finance.
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