Buyers often misunderstand the rules around eligibility for obtaining a Land Transfer Tax credit as a “first time homeowner” both in Ontario and in the City of Toronto. (And in my experience, this often stems from misinformation provided by real estate agents).
Let me give you the facts.
In order to qualify for the Provincial Land Transfer Tax and Municipal Land Transfer Tax credits, the following criteria must be met:
- The buyer must be at least 18 years old;
- He or she must never have owned an eligible home anywhere in the world; and
- His or her spouse must not have owned an eligible home anywhere in the world while the First Time Buyer was a (married or common-law) spouse of an individual who owned a home.
Occupancy Requirements for First Time Purchasers
Furthermore, to qualify for the credit, the First Time Purchaser must occupy the home as his or her principal residence no later than 9 months after the date of Conveyance; i.e. the date of closing of the house purchase.
Spousal Declaration
A First Time Purchaser may claim a rebate of Municipal Land Transfer Tax in proportion to the interest in land acquired by him/her, plus the interest acquired by his/her spouse (provided that such spouse has not owned an eligible home, anywhere in the world, since becoming his or her spouse). In order for a First Time Purchaser to claim on behalf of both spouses, the “Spousal Declaration” must be signed by the First Time Purchaser’s spouse. An individual who has not previously owned a home cannot claim to be a “First Time Purchaser” if his/her spouse owned a home while being the spouse of that individual; in that case, neither spouse is eligible for a rebate.
Eligible Home
For First Time Purchasers, an eligible home includes certain newly constructed homes, resale homes, mobile homes, cottages, chalets, etc.
There have recently been rumours that the Provincial Government may extend to all Municipalities the right to levy various taxes including local Municipal Land Transfer Taxes just as in the City of Toronto. If this does come to pass it will be interesting to see if any municipalities do impose this additional tax and what if any monetary credits the local municipalities will provide.
If you are a Buyer do not claim the credit if you do not qualify. The penalties are significant if you make a fraudulent statement.
Buyers often misunderstand the rules around eligibility for obtaining a Land Transfer Tax credit as a “first time homeowner” both in Ontario and in the City of Toronto. (And in my experience, this often stems from misinformation provided by real estate agents).
Let me give you the facts.
In order to qualify for the Provincial Land Transfer Tax and Municipal Land Transfer Tax credits, the following criteria must be met:
- The buyer must be at least 18 years old;
- He or she must never have owned an eligible home anywhere in the world; and
- His or her spouse must not have owned an eligible home anywhere in the world while the First Time Buyer was a (married or common-law) spouse of an individual who owned a home.
Occupancy Requirements for First Time Purchasers
Furthermore, to qualify for the credit, the First Time Purchaser must occupy the home as his or her principal residence no later than 9 months after the date of Conveyance; i.e. the date of closing of the house purchase.
Spousal Declaration
A First Time Purchaser may claim a rebate of Municipal Land Transfer Tax in proportion to the interest in land acquired by him/her, plus the interest acquired by his/her spouse (provided that such spouse has not owned an eligible home, anywhere in the world, since becoming his or her spouse). In order for a First Time Purchaser to claim on behalf of both spouses, the “Spousal Declaration” must be signed by the First Time Purchaser’s spouse. An individual who has not previously owned a home cannot claim to be a “First Time Purchaser” if his/her spouse owned a home while being the spouse of that individual; in that case, neither spouse is eligible for a rebate.
Eligible Home
For First Time Purchasers, an eligible home includes certain newly constructed homes, resale homes, mobile homes, cottages, chalets, etc.
There have recently been rumours that the Provincial Government may extend to all Municipalities the right to levy various taxes including local Municipal Land Transfer Taxes just as in the City of Toronto. If this does come to pass it will be interesting to see if any municipalities do impose this additional tax and what if any monetary credits the local municipalities will provide.
If you are a Buyer do not claim the credit if you do not qualify. The penalties are significant if you make a fraudulent statement.
