• First-time home buyers in Ontario can receive a land transfer tax refund of up to $4,000
• You’ll receive the maximum Ontario land transfer tax refund amount if you’re a first-time home buyer that is purchasing a home in Ontario with a price of $368,000 or less
• First-time home buyers in Toronto can also receive a municipal land transfer tax rebate of up to $4,475
• Ontario First-Time Home Buyer Incentive

The Government of Ontario provides incentives to its citizens who are first-time home buyers. You can receive a land transfer tax refund in Ontario of up to $4,000. What this means is if the purchase price of your home is less than $368,000, you would pay no land transfer tax. If the purchase price is greater than $368,000, then you would receive the maximum refund of $4,000. This incentive applies for both new construction and resale homes.

How Land Transfer Taxes Calculated?

Ontario land transfer tax is calculated based on marginal tax rates based on the purchase price of your home. The Ontario Land Transfer Tax refund applies to the provincial land transfer tax portion. The refund is a flat amount that applies to the tax payable up to a maximum refund limit of $4,000. In other words, you can receive up to $4,000 off the land transfer tax if you are a first-time home buyer in Ontario.

If the land transfer tax payable is less than $4,000, which will happen if your home’s purchase price is $368,000 or less, then you will not have to pay any Ontario land transfer tax. If your land transfer tax payable is more than $4,000, then the amount that you will have to pay will be discounted by $4,000.

In this case, the original land transfer tax amount was $2,975. Since this is less than the maximum tax refund of $4,000, the tax refund cancels out the original tax amount. This means that first-time home buyers will have $0 land transfer tax for a $300,000 home in Ottawa.

Who qualifies as a first-time home buyer in Ontario?

To qualify as a first-time home buyer, you must not have owned a home previously anywhere in the world, or have any interest or stake in a home. Your spouse must not have owned or have an interest in a home while they were your spouse. To be eligible for Ontario's land transfer tax refund, you must also be at least 18 years old.

How do I qualify for Ontario’s Land Transfer Tax Refund?

In addition to being a first-time home buyer and being 18 years old, you must also be a Canadian citizen or a permanent resident. If you are currently not a Canadian citizen or a permanent resident, you have 18 months after your home registration to become one to qualify for the refund. The home you are purchasing must be your principal residence within nine months. While you can claim the refund when registering your property to offset the land transfer tax payable, you have up to 18 months after registration to claim the refund. If one or more purchasers of the home is not a first-time home buyer, you may still be eligible for a refund of your land transfer tax. For example, if two individuals purchase a home but only one of them is a first-time home buyer, then only 50% of the transfer tax refund can be claimed.