The mortgage rules have been changing a lot in 2016! I’m sure you have seen many posts across the news and social media, talking about all the rule changes with mortgages. There is now something new being added to the mix, which is beneficial for First Time Home Buyers! Ontario is now doubling the rebate on the land transfer tax for First Time Home Buyers to $4,000. This is an effort to help them enter the housing market, but it is raising the same tax on homes that sell for over $2 million.
This increased rebate will take effect January 1, 2017 and will mean that eligible homebuyers in Ontario would pay no Land Transfer Tax (LTT) on the first $368,000 of their home’s purchase price.
Currently, land transfer tax is calculated as:
1/2% on the first $55,000
1% from $55,000 to $250,000
1.5% from $250,000 to $400,000
2% over $400,000
Remember, a first time buyer is anyone who has never owned a home, anywhere in the world. In addition, if you are buying a home with someone who has owned a home before, you will not qualify as a First Time Home Buyer.
The provincial government is also blocking non-Canadian and foreign investors from accessing these rebates.