Land Transfer Tax Questions and Answers

Do I qualify for the Land Transfer Tax Refund for First-time Homebuyers if I signed my agreement of purchase and sale for my resale home on December 1, 2007?

No, the Land Transfer Tax Refund Program for First-time Homebuyers of resale homes only applies to agreements of purchase and sale entered into after December 13, 2007.

First-time buyers who enter into an agreement of purchase and sale before December 14, 2007 may still be eligible for a land transfer tax refund, but only if the home is newly constructed.

Applications for a refund must be made within 18 months after the date of the transfer.

For further information refer to Ontario Tax Bulletin LTT 1-2008 Land Transfer Tax Refunds For First-time Homebuyers.

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If a parent is also on title to a child's property at the insistence of the bank, is the child eligible for the refund as long as all of the other conditions are met?

In this situation, it will be necessary to pay land transfer tax at the time of registration and apply for a refund from the ministry.

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 newly constructed home refund, provided that evidence of the trust is submitted (e.g., a letter from the bank confirming that the parent is on title for mortgage purposes).

For further information refer to Ontario Tax Bulletin LTT 1-2005 – Conveyances Involving Trusts.

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How do I apply for the refund of land transfer tax for first-time homebuyers?

Normally, upon registration, your lawyer will complete the appropriate tax statements in the electronic land registration system, and the refund will be deducted automatically from the land transfer tax that would otherwise be payable.

If this did not occur, after registration you can apply for the refund by submitting an application to the ministry consisting of the following documentation:

• completed Land Transfer Tax Refund Affidavit For First-time Purchasers;
• copy of the registered conveyance;
• evidence of the amount of tax paid on registration;
• copy of the Agreement of Purchase and Sale (including all schedules and amendments);
• copy of the Statement of Adjustments; and,
• copy of the Tarion new home warranty certificate (if applicable).

For further information, refer to Ontario Tax Bulletin LTT 1-2008 Land Transfer Tax Refunds For First-time Homebuyers.

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My spouse and I are buying our first home together. I have owned a home before, but sold it before we became spouses. My spouse has never owned a home. Does she qualify for the First-time Homebuyers Refund?

Yes, even though you are not a first-time homebuyer, your spouse may claim a refund up to the maximum, as long as you did not own a home while you were each others "spouse."

Where a husband who is not a first-time purchaser and a wife who is a first-time purchaser, purchase a home together, the wife may claim the land transfer tax refund with respect to her interest. The wife may also claim a refund of land transfer tax with respect to her husband's interest, if he sold his interest in all homes that he previously owned before becoming her spouse.

For land transfer tax purposes, "spouse" means either of two persons who are married to each other, or who are not married to each other and who have cohabited:

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

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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.

For land transfer tax purposes, "spouse" means either of two persons who are married to each other, or who are not married to each other and who have cohabited:

• continuously for a period of not less than three years; or
• in a relationship of some permanence, if they are the natural or adoptive parents of a child.
  If you are not spouses, then your partner may claim a refund based on his/her interest acquired in the home.

If you are "spouses", your partner may claim a refund up to the maximum, 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 each other's "spouse", then your partner does not qualify for a refund even if you did not live in the house together.

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What are the requirements to qualify for the refund of land transfer tax for first-time homebuyers?

The requirements are as follows:

• The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
• If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a 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 must be at least 18 years of age.
• The application for a refund must be made within 18 months after the date on which the conveyance or disposition occurred. (Note that an application for the refund can be completed upon the electronic registration of the conveyance).
• The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.
• The purchaser cannot have previously received an Ontario Home Ownership Savings Plan (OHOSP) based refund of land transfer tax.
• If the agreement of purchase and sale is entered into before December 14, 2007, the home must be newly constructed.

For further information refer to Ontario Tax Bulletin LTT 1-2008 Land Transfer Tax Refunds For First-time Homebuyers.

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