ONTARIO LAND TRANSFER TAX REFUND
(Revised April 16, 2018)
ELIGIBILITY REQUIREMENTS NOTE: On November 14, 2016, the Ontario government increased the first time buyer deduction from $2,000 to $4,000 (on first $368,000 of price) on purchases closing after January 1, 2017.
Eligibility requirements for refund/deduction for first time buyers for Ontario Land Transfer Tax are:
1) Purchaser must be 18 years or older
2) Must use property as principal residence within 9 months of closing
3) A spouse of the first time buyer must not have owned any residential property anywhere in the world during the marriage
4) If the offer to purchase was accepted AFTER November 14, 2016, any buyer claiming to be a FIRST TIME BUYER, being entitled to a deduction must ALSO be either a Canadian Citizen or a Permanent Resident or if not, must pay full Ontario LTT and apply for refund if within 18 months of the closing date, the buyer applies for the refund after achieving Canadian Citizenship or Permanent Resident status within such 18 months
NEVER OWNED A HOME: You(or your spouse) must be at least 18 years of age and never have owned an interest in a home anywhere in the world(since you became spouses). Spouse includes a common-law spouse of three (3) years or more or where there is a natural or adoptive child between the common-law spouses. If, since becoming spouses, both spouses did not own a home, but one spouse owned a house which was sold prior to marriage(resulting in such spouse who did own a home being disqualified as a first-time buyer), the remaining first-time buyer spouse may claim total available refund(even if both spouses take title).
PARTNERSHIP PURCHASE (NON-SPOUSAL): If father and son buy a home(or any two non spouses) and one(only) is a first-time buyer with a 50% interest(for example), such first-time buyer can claim a refund of 50% of the Ontario Land Transfer Tax refund available being half of $4,000.00.
a) The refund is instantly available on closing of the real estate purchase. Any amount of Ontario land transfer tax above the allowed maximum refund must be paid on closing.
b) Where a qualifying purchaser did not claim an immediate refund at time of a purchase closing, the tax will be payable at that time and a refund claim may be made directly to the Ministry of Finance. This application must be made within eighteen months of registration of the conveyance and no interest is payable on this refund. The following documentation must be submitted in order for a refund claim to be processed(if claim for refund was not made by purchaser’s lawyer, for the purchaser, at the time of closing):
1. A properly completed Ontario Land Transfer Tax Refund Affidavit form,
2. Copy of the registered transfer/deed,
3. Copy of the agreement of purchase and sale,
4. Copy of the statement of adjustments at time of completion of purchase.