What is the land transfer tax rebate? Can you benefit?

What is it?

A land transfer tax rebate is a refund of all or part of the land tax paid on a property purchase.

Available in select provinces and cities across Canada, land transfer tax rebates help first-time home buyers recoup some or all of the cost of their land transfer tax. A pretty attractive offer after you make what is likely to be the biggest purchase of your life! 

If you’re eligible, land transfer tax rebates are available to first-time homebuyers in the provinces of Ontario, British Columbia and Prince Edward Island, as well as the City of Toronto.

How it works in Ontario

In Ontario, first-time homebuyers may be eligible for a rebate that matches the entire amount of their land transfer tax, up to a maximum of $4000.

Think you might be eligible for the Ontario Land Transfer Tax Refund for First-Time Homebuyers? See if you meet these requirements:

  • You are 18 years of age or older
  • You are a Canadian citizen or permanent Canadian resident
  • You have never owned a home before
  • You will live in the home within 9 months of purchasing it
  • If you have a spouse, he or she has never owned a home during the time you’ve been married

Now let’s get into the specifics. When it comes to Ontario land transfer tax rates, the rebate covers the entire tax amount up to a maximum home buying price of $368,333. If you buy a home with a purchase price greater than $368,333 you’re still eligible for the maximum rebate amount ($4000) – you’ll simply have to pay the remainder out of pocket.

And if you’re purchasing your home with your spouse, but only one of you is eligible for the rebate, you can still get up to 50%.

When the time comes, your real estate lawyer will help you file the required documents. There are two filing methods for the land transfer tax rebate:

  • Electronically
  • Via download of the Ontario Land Transfer Tax Refund Affidavit for First-Time Purchasers of Eligible Homes

Note* You must apply within 18 months of the date of transfer to be eligible for the land transfer tax rebate.

How does Toronto’s Land Transfer Tax Rebate work?

The City of Toronto has its own municipal land transfer tax. Unfortunately for Toronto homebuyers, they’re subject to not one but two land transfer taxes – both the municipal and the provincial.

The good news is first-time homebuyers in Toronto may be eligible for a rebate that equals the amount of their municipal land transfer tax up to a maximum of $4,475. And that’s not all. You’re still eligible for the Ontario rebate too.

Think you might be eligible for the Toronto Municipal Land Transfer Tax Rebate for First-Time Purchasers? Check if you meet the following requirements: 

  • You are 18 years of age or older
  • You are a Canadian citizen or permanent Canadian resident
  • You have never owned a home before
  • You will live in the home within 9 months of purchasing it
  • If you have a spouse, he or she has never owned a home during the time you’ve been married

According to Toronto’s land transfer tax rates, the rebate covers the entire tax amount up to a maximum home buying price of $400,000. If you buy a home with a purchase price that exceeds $400,000, you’re still eligible for the maximum rebate. Then you just need to pay what’s left over.

And similar to the provincial regulations, if you’re purchasing your home with your spouse, but only one of you is eligible for the Toronto rebate, you can still get 50% refunded to you. When everything is ready, your real estate lawyer claims the rebate electronically via Teraview when he or she registers your deed/transfer.