In Toronto, on the purchase of a home you pay the Provincial Land Transfer Tax as well as the City of Toronto Land Transfer Tax when ownership of a property is transferred from one party to another.
If you are a first time homebuyer you may be eligible for a rebate on these taxes. Both taxes are calculated based on the purchase price using a graduated scale and are payable on closing.
The Ontario Provincial Land Transfer Tax for residential properties is calculated as follows:
First time home buyers of a newly constructed or resale home or condominium are eligible for a rebate. You (or your spouse) must be at least 18 years of age and never owned an interest in a house (since becoming spouses - spouses include a common-law spouse), and plan to occupy the home as a principal residence no later than 9 months from closing.
If since becoming spouses, both spouses do not own a home, but one spouse owned a house which was sold prior to marriage, the remaining 1st time home buyer spouse may claim the total available refund.
A maximum rebate of $2,000 can be claimed which is the equivalent to the Provincial LTT payable on the purchase of a $227,500 home (net of GST). This rebate is instantly available on closing for eligible parties.
The City of Toronto Land Transfer Tax for residential properties is calculated as follows:
First time home buyers of newly constructed or resale homes are eligible for a rebate of the TLTT. Eligibility requirements for the rebate mirror those of the Provincial Land Transfer Tax rebate program.
The maximum TLTT rebated is $3,750, which is the equivalent of the TLTT payable on the purchase of a $400,000 home.