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LAND TRANSFER TAX (LTT) REBATE PROGRAM
First-time home buyers who purchase a newly constructed home after May 7, 1996 and before March 31, 2001 will receive a rebate of the Land Transfer Tax (LTT). All other buyers will continue to pay the full applicable tax. The maximum LTT rebate is $2,000.
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The 1996 Ontario Budget announced a special one-year provision to the LTT that has been renewed every year and is currently slated to expire on March 31, 2001.
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FIRST-TIME BUYERS who purchase a NEWLY CONSTRUCTED HOME after May 7, 1996 and before March 31, 2001 will receive a rebate of the LTT. All other buyers will continue to pay the full applicable tax.
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Buyers with agreements to purchase a home with possession dates between May 7, 1996 and December 31, 2001 qualify for the rebate. The transfer must be registered before December 31, 2002. The maximum rebate is $2000. If an individual owns less than 100% interest in the newly-built home, the amount of the rebate would be reduced and calculated according to the amount of interest in the home.
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A rebate of $2,000 is equivalent to the LTT payable on a purchase price of $227,500 (net of
GST).
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Only individuals who are at least 18 years of age, have not (or spouse) previously owned an interest in a home anywhere qualify for the rebate.
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Individuals who have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of the LTT do not qualify.
A real estate transfer tax is assessed on real property when ownership of the property is transferred from one party to another. The tax is a percentage of the value of the property based on a graduated scale:
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+1.0% on the amount exceeding $55,000 up to and including $250,000
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+1.5% on amounts above $250,000 up to and including $400,000 for (residential) +1.5% on the amount in excess of $250,000 for (business properties)
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+2.0% of the amount in excess of $400,000. [residential only]
These four portions added up together total the LTT payable. A simple formula is as follows:
| Purchase Price |
Calculation of LTT |
| $0 to $55,000 |
.005 x purchase price |
$55,001 to $250,000 |
(.01 x purchase price) minus $275 |
$250,001 to $400,000
(residential)
$250,001 plus
(business) |
(.015 x purchase price) minus $1525
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$400,001 plus
(residential only) |
(.02 x purchase price) minus $3525 |
If the purchase price falls within this range, then apply the appropriate formula to the purchase price. For example on a $200,000 property, the LTT calculation would be [(.01 x $200,000) minus $275 = $1725].
For more information call the Ontario Finance Ministry at 1-800-263-7965 or
access through the web.
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BUYING FORM
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