Realty Executives of Simcoe Inc. Brokerage
Broker of Record (705) 727-6777
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“Modernized” Ontario Land Transfer Tax Rates
Home Purchase Price Tax Rate
Up to $55,000 0.5% or $56.00 per $1,000.00 or $275.00
$55,000 to $250,000 1.0% or $10.00 per $1,000.00 or $1950.00
$250,000 to $400,000 1.5% or $15.00 per $1,000.00 or $2,250.00
$400,000 to $2-million 2.0% or $20.00 per $1,000.00
$2-million and over 2.5% or $25.00 per $1,000.00
Keep in mind, however, that buyers of multi-residential buildings (such as triplexes), commercial, industrial or agricultural properties will be required to pay 2% tax rate on any purchase price over $400,000.
First-time homebuyers have an opportunity to use their RRSP contribution towards a down payment, using the Home Buyer’s Plan (HBP). Under the federal HBP, you can withdraw up to $25,000 from any RRSP account, as long as those savings were deposited more than 90 days before your request to withdraw. (Your mortgage lender can provide the official Canada Revenue Agency form or you can get this form T1036 by going online.) Keep in mind, you have to pay back this interest-free loan over a 15-year period and any year you don’t make a payment, that annual sum is added to your income and taxed at your marginal rate. The good news is that couples can withdraw a total of $50,000 combined from their RRSP accounts, which can make a huge contribution towards a down payment. To qualify for the HBP you and your spouse must not have lived in a home owned by either person for the five years prior to using the HBP.
Homebuyers who have not owned a home within the last four years may be eligible for the first-time homebuyer’s tax credit (HBTC) through the Government of Canada’s Economic Action plan. The credit is based on $5,000 multiplied by the lowest federal income tax rate for that year. For example, the lowest federal income tax rate for 2014 is 15%, so the value of the credit would be $750. You can learn more about the first time homebuyer’s tax credit on the Economic Action Plan website.
As a first-time homebuyer, you can receive a refund from the Ontario government of up to $2,000 of the land transfer tax you paid on your first home. (Keep in mind, other provinces have similar programs.)
To qualify for this refund, you must be 18 or older, you cannot have previously owned a home (or an interest in a home, which includes putting your name on the deed of your parent’s cottage in order to avoid probate fees), and this all applies to property anywhere in the world. Typically, your lawyer will apply for the fee as you finalize your real estate purchase, but if that doesn’t happen you have 18 months after the registration date of the sale. Ready to Start Searching for a Home. Register a Search online, Automatic Leads of New Listings
Finally there’s the Energy Efficient Housing rebates. While not restricted to first-time homebuyers, these rebates can certainly help first-time buyers.
There are a variety of rebates both at the federal and provincial levels. For instance, Genworth offers the Energy-Efficient Housing program. Available across Canada, this rebate provides a partial refund of up to 25% of the Genworth Canada insurance premium, based on the date of application for the mortgage insurance. If you bought a $300,000 home with only 5% down, you would have to pay $10,800 in insurance premiums. Under the Energy-Efficient refund program, you could save $1,620 off those premium rates. For eligibility requirements, see Genworth’s website.
Thanks for your help Romana King, MoneySense.