On January 1, 2017 new Provincial Land Transfer Tax rules became effective. There are four major points that you should know:
1. First-time buyer rebates have increased from $2,000 to $4,000. You qualify you must not have owned a home anywhere in the world and you must make your purchase your primary residence within 9 months of closing. If your new purchase is an investment property, you will not qualify for the rebate.
2. If you are married and your spouse has owned a property during your marriage, then neither of you will qualify. If,
however, your spouse owned a property and sold it prior to your marriage, you will qualify for the full rebate. You will apply for half the rebate on closing and the other half within 18 months of closing since additional documentation will be
required proving qualification. These rules apply to common-law spouses, as well.
3. If you qualify for the rebate, but you share title with your parents, who may be assisting with the mortgage, then qualifying parents’ names, this will satisfy your lender for mortgage qualification AND you can still obtain the benefit of 99% of the
4. Provincial Land Transfer tax rates also changed January 1, 2017. For every commercial, industrial, apartment building, or vacant land that costs more than $400,000, the tax rate will increase from 1.5% to 2%.
If you buy a house or duplex that costs more than $2 million dollars, the portion of the transaction over $2 million will be taxed at a rate of 2.5% (up from 2%).
If you signed your Agreement of Purchase and Sale prior to November 14, 2016, and you close in 2017, then your land transfer tax will be calculated under the old rules.
If you purchase in the City of Toronto, you will be paying an additional land transfer tax. No rate increases have been announced for this portion of your purchase.
– Chip Barkel, MCNE, SRES, REDM, Toronto Real Estate. Extraordinary Service. Top Results.