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Tuesday, March 24, 2015

Land Transfer Tax Refund for First-time Homebuyers

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.

How much money could I receive?

The maximum amount of the refund is $2,000.
For example:
Cost of HomeTax PayableTax RefundNet Tax Payable
If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Finance, within 18 months after the transfer. No interest is paid on this refund.

Do I qualify?

To get a refund of land transfer tax, you:
  • must be at least 18 years old
  • must occupy the home as your principal residence within nine months of the date of transfer
  • cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, and
  • if you entered into an agreement of purchase and sale before December 14, 2007, the eligible home must be newly constructed and you must be eligible for  the Tarion New Home Warranty.
If you have a spouse, your spouse cannot have owned an eligible home, or an interest in an eligible home, anywhere in the world while being your spouse.
You must apply for a refund within 18 months after the date of the transfer.

How do I get the refund?

If you qualify, you can claim an immediate refund at time of registration in one of two ways:
  • If registering electronically, complete the required statements under the "explanation" tab of the land transfer tax statements.
  • If registering on paper, file an Ontario Land Transfer Tax Refund Affidavit For First-time Purchasers of Eligible Homes at the Land Registry Office.

Refunds claimed after registering

If you did not claim the refund at the time of registration and paid all of the land transfer tax owing, you can apply for a refund. To do this, you must submit:
  • an original, completed Ontario Land Transfer Tax Refund Affidavit for First-time Purchasers of Eligible Homes
  • a copy of the registered conveyance (transfer/deed)
  • evidence of the amount of tax that was paid on registration
  • a copy of the docket summary (if transfer was registered electronically)
  • a copy of the agreement of purchase and sale (including all schedules, amendments and assignments)
  • a copy of the statement of adjustments relating to the conveyance
  • a copy of documents that provide proof of occupancy of the home, such as copies of telephone/cable bills, 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

Send your application to

Ministry of Finance
Advisory and Compliance Branch
33 King Street West
PO Box 625
Oshawa ON L1H 8H9
The application and any refund payment may be audited by the Ministry of Finance. Charges may be laid and fines result if you obtain or attempt to obtain a refund by deceit, falsehood or any fraudulent means.
source:  Ontario Ministry of Finance 

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