Buying your first home is exciting, but it also comes with a lot of costs. One cost many people forget about is called the Land Transfer Tax (LTT). This is a tax (extra fee) you pay when you buy a home. If you're buying in Toronto, this tax can be a big number. But the good news is that there are rebates (money back) to help you save.
Let’s break it down clearly and simply.
What is Land Transfer Tax?
When you buy a home in Ontario, you pay the provincial LTT. If you're buying in Toronto, you also pay an additional municipal LTT (MLTT). The amount depends on your home’s purchase price. For example, on a $700,000 home in Toronto, you’d pay roughly $20,950 in total land transfer tax.
Rebates Available for First-Time Buyers
If you're a Canadian citizen or permanent resident first-time buyer, you could be eligible for a Land Transfer Tax rebate from both the Province of Ontario (up to $4,000) and the City of Toronto (up to $4,475). In place since 2007 and 2008, respectively, these rebates are automatically applied if your lawyer registers your eligibility during closing, but we always recommend confirming this ahead of time.
Do You Qualify?
To be eligible for the first-time home buyer land transfer tax rebate, you must be a Canadian citizen or permanent resident, intend to live in the home as your primary residence, and must not have previously owned a home or even a portion of one. You also need to apply within 18 months of the purchase. If you’re buying with someone who isn’t a first-time buyer, your rebate will be prorated based on your share of ownership. This rebate can help ease some of the financial pressure that comes with buying your first home.
Our clients often ask us, “Should I buy now or wait?” Our answer is: Let’s look at the numbers together. If this rebate is part of your financial picture, it could tip the scale in your favour.
Book a call with us, and we’ll run a real breakdown based on your budget and help you make an informed decision.
