The First Time Buyer incentives were changed on January 1, 2017, first-time buyers who are permanent Ontario residents, do not pay land transfer tax on the first $368,000 of the cost of their homes. Given lower prices in some of our areas of expertise, outside of Toronto, and in the West GTA & Hamilton area, this could mean no land transfer tax on the purchase for your first home. Or, at the very least, it is closing cost savings of $4000for your 1st home, instead of the former $2000 incentive.
Tenants are also getting a benefit, as the also government froze the property tax on apartment buildings — which are taxed at more than double the rate of other residential properties and condos, for example — while it reviews how the “high property tax burden” impacts the affordability of rentals.
The government has increased land transfer rates on houses that cost more than $2 million, this is how they have funded the extra break for First Time Buyers. For every dollar over and above that, the rate will rise from 2 per cent to 2.5 per cent.
But the tax on the portion of the purchase price between $400,000 and $2 million will remain at 2 per cent.
The rate between $250,000 and $400,000 stay at 1.5 per cent, and between $55,000 and $250,000 at 1 per cent.
And the rate for the first $55,000 of a purchase price will remain at 0.5 per cent.
This applies only to properties with one or two single-family residences.
For other types of properties, such as apartment buildings, the only increase will be on the portion over and above $400,000, which will jump from 1.5 per cent to 2 per cent.
If you are purchasing your 1st home in Toronto, it won’t make much difference with the city of Toronto’s secondary City/ Municipal land transfer tax. Here in the West GTA and Hamilton areas, it will make quite a difference if you are buying for the 1st time!
If you need clarification or have any questions, give us a call at (905) 512-5547 or you can email us at email@example.com or firstname.lastname@example.org We are always available to help and get answers for you!