REFUNDS AND REBATES

LAND TRANFER TAX REFUND

The tax refund program applies to agreements of purchase and sale entered into after December 13, 2007 for newly constructed and resale homes.

Who is Eligible?

1. You must be at least 18 years of age;
2. occupy the home as your principal residence within 9 months of after the date of transfer; and
3. cannot have owned a home, or an interest in a home, anywhere in the world.

In addition:

1. your spouse cannot have owned a home, or an interest in a home, anywhere in the world while being your spouse; and
2. in the case of a newly constructed home, you must be entitled to a Tarion New Home Warranty

What if I Qualify?

The maximum amount of the refund is $2,000. 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 Revenue. No interest is paid on this refund.

On July 1, 2010, Ontario introduced a federally administered Harmonized Sales Tax (HST) that applies to most purchases and transactions.

The HST applies to newly constructed homes, but does not apply to resale homes. Buyers of new homes will receive a rebate of up to $24,000 regardless of the price of the new home.

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

Kyle & van der Steen will assist with the preparation and submission of your application for the land transfer tax refund as part of our comprehensive services.

Other Programs for First-Time Homebuyers

Using your RRSP Savings

If you are a first time buyer, and have assets invested in an RRSP, you can withdraw up to $20,000 to apply towards the purchase of a home. You are considered a first time home buyer if you have not lived in a home owned by yourself or your spouse in the last five years.

In addition to being a first time home buyer, you must have entered into a written agreement to buy or build a home and intend to occupy that home as a principal residence. Any funds you wish to withdraw under the program must have been in your RRSP for at least 90 days. If you have less than $20,000 in an RRSP, it’s not too late to save money. You can make a contribution to your RRSP early in the year before the RRSP deadline. You can then receive a tax refund and 90 days later withdraw the RRSP contribution for use in buying a home.

Once you have applied the RRSP funds to the purchase of your home, you are required to pay back the RRSP over 15 years. Ordinarily, you will deposit 1/15 of the amount withdrawn back into your RRSP in each of the 15 years following your home purchase. If you fail to repay an amount required in any given year, then that amount will be included in your taxable income for the year.

Ontario Home Ownership Savings Plan

In addition to withdrawing RRSP funds, the Ontario government has established the Ontario Home Ownership Savings Plan (OHOSP) which provides a tax credit for contributions of up to $2,000 per year to the plan. In order to qualify, you must be earning under $40,000 per year, or have combined spousal incomes of less than $80,000 per year. Once you have signed an agreement of purchase and sale for a home, your bank will release the funds to your solicitor to be applied toward the purchase