Land Transfer Tax Refunds for First-Time Homebuyers

Table of contents

Introduction

Refund amounts and limitations

Requirements to qualify for the refund

Procedures to apply for the refund

Definitions


Introduction

When you buy land or an interest in land in Ontario, you pay land transfer tax. First-time homebuyers of an eligible home may be eligible for a refund of all or part of the tax.

To claim a refund, you must be at least 18 years of age, you cannot have owned a home or an interest in a home anywhere in the world, and your spouse cannot have owned a home or interest in a home, anywhere in the world while he or she was your spouse. Previous ownership in a home means you do not qualify for the land transfer tax first-time homebuyers refund. The method of acquiring the home (e.g., purchase, gift or through an inheritance) is not relevant.

You cannot re‑qualify as a first‑time homebuyer. This rule may be different from other federal programs for first‑time homebuyers (e.g., the Canada Revenue Agency Home Buyers' Plan).

General

Land transfer tax applies to all conveyances of land in Ontario. First‑time homebuyers may be eligible for a refund of all or part of the tax payable.

  • For agreements of purchase and sale entered into before December 14, 2007, the refund only applies on the purchase of a newly constructed home.
  • For agreements of purchase and sale entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.

Qualifying taxpayers may claim an immediate refund at time of registration as follows:

If the refund is not claimed at registration, the tax must be paid and a claim for the refund may be submitted directly to the Ministry of Finance at the address at the end of this bulletin.

If the refund is claimed at the time of registration, it may offset the land transfer tax that would be payable. If the refund is not claimed at registration, the tax must be paid, and a claim for the refund may be submitted to the Ministry of Finance. No interest is paid on this refund. Procedures for refunds are outlined below, under Procedures to apply for the refund.

Refund amounts and limitations

How much money could I receive?

For conveyances or dispositions that occur before January 1, 2017, the maximum amount of the refund is $2,000.

Beginning January 1, 2017, the maximum amount of the refund is $4,000. The increased limit of $4,000 applies only to conveyances or dispositions that occur on or after January 1, 2017, regardless of the date the agreement of purchase and sale was signed.

Beginning January 1, 2017, no land transfer tax would be payable by qualifying first‑time purchasers on the first $368,000 of the value of the consideration for eligible homes. First‑time purchasers of homes greater than $368,000 would receive a maximum refund of $4,000.

For information on determining the value of the consideration for transfers of new homes, read Determining the Value of the Consideration for Transfers of New Homes.

For information on calculating land transfer tax, read Calculating Land Transfer Tax.

Limitation

The refund will be reduced if one (or more) of the purchasers is not a first‑time homebuyer. The refund will be proportionate to the interest acquired by the individuals who qualify for the refund.

Examples – Parent and Child

Where a parent who is not a first‑time homebuyer, and a child who is a first‑time homebuyer, purchase a home with equal 50/50 interests, the child may claim a refund of 50% of the land transfer tax refund. The child's claim cannot exceed 50% of the maximum allowable refund (i.e., 50% of $2,000 for conveyances or dispositions prior to Januar  1, 2017 or 50% of $4,000 for conveyances or dispositions on or after January 1, 2017).

In a situation where a parent is also on title to a child's property, such as at the insistence of a bank, it will be necessary to pay land transfer tax at the time of registration and apply for a refund from the Ministry of Finance.

If the parent did not acquire a beneficial interest in the property as a result of the conveyance:

  • the ministry will accept the fact that the parent was on title as a trustee for the child, and
  • the child would qualify for the first‑time homebuyers refund, provided that all other eligibility requirements are met, and evidence of the trust is submitted (e.g., a letter from the bank confirming that the parent is on title for mortgage purposes or a copy of a trust agreement).

Example ‑ Spouse

A qualifying purchaser may also claim a refund in proportion to his or her spouse's interest if that purchaser's spouse has owned a home before becoming the purchaser's spouse, but not while being that purchaser's spouse.

My partner and I are buying a home together. I have owned a home, but he has not. Does he qualify for the first‑time homebuyers refund?

Your partner's eligibility for a refund depends on whether you are spouses as defined in section 29 of the Family Law Act. Please refer to the Definitions section for the meaning of spouse.

If you are not spouses, then your partner may claim a refund based on his interest acquired in the home. If you are spouses, your partner may claim a refund up to the maximum refund amount applicable to your transaction (you can claim the refund for your interest and your partner's interest), as long as you did not own a home while you were each other's spouse. If you did own the home while you were spouses of each other, then your partner does not qualify for a refund even if you did not live in the house together.

Please refer to the Refund amounts and limitations section for information about maximum refund amount.

Requirements to qualify for the refund

To qualify for a refund:

  • The purchaser must be at least 18 years old.
  • The purchaser must occupy the home as their principle residence within nine months of the date of transfer.
  • The purchaser cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, at any time.
  • If the purchaser entered into an agreement of purchase and sale before December 14, 2007, the home must be a newly constructed home and the purchaser must be eligible for the Tarion New Home Warranty.
  • If the purchaser has a spouse, the spouse cannot have owned an eligible home, or had any ownership interest in an eligible home, anywhere in the world, while he or she was the purchaser's spouse. If this is the case, no refund is available to either spouse.
  • The purchaser cannot have previously received an Ontario Home Ownership Savings Plan (OHOSP) ‑ based refund of land transfer tax.

Additional requirement

Beginning January 1, 2017, eligibility for the first‑time homebuyers refund program is restricted to Canadian citizens and permanent residents of Canada.

As a transitional measure, purchasers who entered into agreements of purchase and sale on or before November 14, 2016, would remain eligible for the refund regardless of citizenship or residency status.

Purchasers who would otherwise be eligible for a refund, but who are not Canadian citizens or permanent residents of Canada when the transaction closes, have 18 months following registration to become eligible. Upon obtaining Canadian citizenship or permanent resident status, these purchasers may apply for the refund within the 18‑month period following registration of the conveyance or the date the unregistered disposition occurs.

Time limit to apply for refund

A qualifying purchaser must apply for the refund within 18 months after the date of registration of the conveyance or the date the unregistered disposition occurs.

Audit

The application and any refund payment are subject to audit by the Ministry of Finance. Charges may be laid, and fines may result, where a person obtains or attempts to obtain a refund by deceit, falsehood or any fraudulent means.

Procedures to apply for the refund

Electronic registration

In the electronic land registration system, the refund may be claimed by selecting the appropriate electronic statements located under the Explanation tab of the land transfer tax section. Statement 9028 or 9029 must be completed.

As well, the following statements must be completed:

9127 and
9128 or (9129 and either 9130 or 9131) and
9132 and

In addition, for agreements of purchase and sale entered in prior to December 14, 2007 where the home purchased must be a newly constructed home, the following statement must be completed:

9133

Statements 9028, 9029, 9127, 9131, 9132 and 9133 require additional information to be entered. The wording of these electronic statements is as follows:

9028

Fraction of parties who are qualifying home purchasers: ALL OR FRACTION (N/D) and the agreement of purchase and sale was entered into before December 14, 2007.

9029

Fraction of parties who are qualifying home purchasers: ALL OR FRACTION (N/D) and the agreement of purchase and sale was entered into after December 13, 2007.

9127

NAMES(S) is/are (a) first‑time home purchaser(s) as defined in the Land Transfer Tax Act and

9128

None of the purchaser(s) is/are a "spouse" as defined in section 29 of the Family Law Act.

9129

The purchaser(s) has/have (a) "spouse(s)" as defined in section 29 of the Family Law Act and

9130

(a) the spouse(s) has/have never owned an eligible home

9131

(b) The spouse(s) NAME(S) previously owned an eligible home at ADDRESS, but sold it on YYYY/MM/DD (Note: In order to qualify for a refund, any spouse must have sold any eligible home prior to becoming the spouse of the first‑time purchaser)

9132

The purchaser(s) will occupy the qualifying home as his/her/their principal residence on YYYY/MM/DD (Note: must be within 9 months of the date of registration or disposition), and

9133

Where the qualifying home is a "newly‑constructed home" in respect of which the purchasers are entitled to a warranty under the Ontario New Home Warranties Plan Act, the registration number for the builder of the newly constructed home is NUMBER.

NOTE: If the refund is claimed in the electronic land registration system, there is no requirement to subsequently submit a paper Ontario Land Transfer Tax Refund Affidavit for First – Time Purchasers of Eligible Homes to the ministry.

Refunds claimed at a land registry office

For paper registrations, qualifying taxpayers or their solicitors may claim an immediate refund at the time of registration by filing the Ontario Land Transfer Tax Refund Affidavit For First‑Time Purchasers of Eligible Homes along with their Transfer/Deed and Land Transfer Tax Affidavit at a Land Registry Office.

Refunds claimed at the Ministry of Finance

Where a qualifying taxpayer is unable to claim the refund at registration, the tax will be payable at that time and a refund claim may be made to the Ministry of Finance, at the address at the bottom of this page. The following documentation must be submitted for a refund claim to be processed:

  • The Ontario Land Transfer Tax Refund Affidavit For First‑Time Purchasers of Eligible Homes.
  • A copy of the registered conveyance (transfer/deed). If not registered electronically, submit a photocopy of the Land Registry Office's original which shows the tax paid.
  • A copy of the docket summary, if the conveyance was registered electronically.
  • A copy of the agreement of purchase and sale, together with all schedules, amendments and assignments, along with a copy of the statement of adjustments relating to the conveyance.
  • Proof of occupancy, with the new address listed, such as copies of telephone/cable bills, credit card statements, driver's licence, newspaper/magazine subscriptions, etc.
  • For agreements of purchase and sale entered into before December 14, 2007, a copy of the Tarion New Home Warranty, which is also known as the Certificate of Completion and Possession.
  • For agreements of purchase and sale entered into after November 14, 2016 and registered on or after January 1, 2017, proof of Canadian citizenship or permanent residence in Canada.

Definitions

"eligible home" means,

  1. a detached house;
  2. a semi‑detached house, including a dwelling house that is joined to another dwelling house at the footing or foundation by a wall above or below grade or both above and below grade;
  3. a townhouse;
  4. a share or shares of the capital stock of a co‑operative corporation if the share or shares are acquired for the purpose of acquiring the right to in‑habit a housing unit owned by the corporation;
  5. a mobile home that complies with the Canadian Standards Association Standard CAN/CSA‑Z240 Mobile Homes and is suitable for year round permanent residential occupation;
  6. a condominium unit;
  7. a residential dwelling that is a duplex, triplex or fourplex;
  8. a partial ownership interest as a tenant in common of real property if the ownership interest was acquired for the purpose of acquiring the right to inhabit a housing unit forming part of the real property;
  9. a manufactured home that is manufactured in whole or in part at an offsite location, that is intended for basement installation, that is suitable for year round permanent residential occupation and that complies with,
    1. the Building Code made under the Building Code Act, 1992;
    2. if the manufactured home is constructed in sections that are not wider than 4.3 metres, Canadian Standards Association Standard Z240.2.1 Structural Requirements for Mobile Homes and Canadian Standards Association Standard Z240.8.1 Windows for Use in Mobile Homes; or
    3. if the manufactured home is constructed in sections that are 4.3 metres or wider, Canadian Standards Association Standard A277 Procedure for Certification of Factory Built Houses, or
  10. any other residential property as may be prescribed.

"newly constructed home" means a home in respect of which the purchaser is entitled to a warranty under section 13 of the Ontario New Home Warranties Plan Act (ONHWPA) and which is sold to the purchaser by a vendor as defined in ONHWPA.

permanent resident of Canada” means a permanent resident as defined in the Immigration and Refugee Protection Act (Canada);

"purchaser" means,

  1. if the conveyance or disposition of the qualifying home occurs before January 1, 2017, an individual who is at least 18 years of age and who has never owned an eligible home anywhere in the world and whose spouse has not owned an eligible home anywhere in the world while he or she was a spouse of the individual,
  2. if the conveyance or disposition of the qualifying home occurs on or after January 1, 2017 and the agreement of purchase and sale for the home was entered into on or before November 14, 2015, an individual who is at least 18 years of age and who has never owned an eligible home anywhere in the world and whose spouse has not owned an eligible home anywhere in the world while he or she was a spouse of the individual, and
  3. if the conveyance or disposition of the qualifying home occurs on or after January 1, 2017 and the agreement of purchase and sale for the home was entered into after November 14, 2015, an individual who is at least 18 years of age, who is a Canadian citizen or permanent resident of Canada, and who has never owned an eligible home anywhere in the world and whose spouse has not owned an eligible home anywhere in the world while he or she was a spouse of the individual.

"qualifying home" means,

  1. for agreements of purchase and sale entered into before December 14, 2007, a newly constructed home, and
  2. for agreements of purchase and sale entered into after December 13, 2007, an eligible home.

"spouse" means spouse as defined in section 29 of the Family Law Act.  At present, "spouse" means either of two persons who, (a) are married to each other, or (b) have together entered into a marriage that is voidable or void, in good faith on the part of a person relying on this clause to assert any right, and in addition includes either of two persons who are not married to each other and have cohabited,

  1. continuously for a period of not less than three years, or
  2. in a relationship of some permanence, if they are the natural or adoptive parents of a child.
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