LAND TRANSFER TAX (LTT) REBATE PROGRAM
First-time home buyers who purchase a newly constructed home after May 7, 1996 and before March 31, 2001 will receive a rebate of the Land Transfer Tax (LTT). All other buyers will continue to pay the full applicable tax. The maximum LTT rebate is $2,000.
- The 1996 Ontario Budget announced a special one-year provision to the LTT that has been renewed every year and is currently slated to expire on March 31, 2001.
- FIRST-TIME BUYERS who purchase a NEWLY CONSTRUCTED HOME after May 7, 1996 and before March 31, 2001 will receive a rebate of the LTT. All other buyers will continue to pay the full applicable tax.
- A rebate of $2,000 is equivalent to the LTT payable on a purchase price of $227,500 (net of GST).
- Only individuals who are at least 18 years of age, have not (or spouse) previously owned an interest in a home anywhere qualify for the rebate.
- Individuals who have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of the LTT do not qualify.
A real estate transfer tax is assessed on real property when ownership of the property is transferred from one party to another. The tax is a percentage of the value of the property based on a graduated scale:
- +1.0% on the amount exceeding $55,000 up to and including $250,000.
- +1.5% on amounts above $250,000 up to and including $400,000 for (residential) +1.5% on the amount in excess of $250,000 for (business properties).
- +2.0% of the amount in excess of $400,000 (residential only).
These four portions added up together total the LTT payable. A simple formula is as follows:
| Purchase Price
|| Calculation of LTT
|$0 to $55,000
||.005 x purchase price
|$55,001 to $250,000
||(.01 x purchase price) minus $275
|$250,001 to $400,000 (residential)
$250,001 plus (business)
|(.015 x purchase price) minus $1525
|$400,001 plus (residential only)
||(.02 x purchase price) minus $3525
If the purchase price falls within this range, then apply the appropriate formula to the purchase price. For example on a $200,000 property, the LTT calculation would be [(.01 x $200,000) minus $275 = $1725].
For more information call the Ontario Finance Ministry at 1-800-263-7965 or access through the web.