Details

The 1996 Ontario Budget announced a special one-year provision to the LTT that was
renewed every year and is now a permanent program.

FIRST-TIME BUYERS who purchase a NEWLY CONSTRUCTED HOME will receive a rebate of the LTT. All other buyers will continue to pay the full applicable tax.

The maximum rebate is $2000. If an individual owns less than 100% interest in the newlybuilt home, the amount of the rebate would be reduced and calculated according to the amount of interest in the home.

A rebate of $2,000 is equivalent to the LTT payable on a purchase price of $227,500 (net of GST).

Only individuals who are at least 18 years of age, have not (or spouse) previously owned an interest in a home anywhere qualify for the rebate.

Individuals who have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of the LTT do not qualify.

A real estate transfer tax is assessed on real property when ownership of the property is transferred from one party to another. The tax is a percentage of the value of the property based on a graduated scale:

0.5% on amounts up to and including $55,000;

+1.0% on the amount exceeding $55,000 up to and including $250,000;

+1.5% on amounts above $250,000 up to and including $400,000 for residential /
+1.5% on the amount in excess of $250,000 for business properties;

+2.0% of the amount in excess of $400,000. [residential only]

For more information call the Ontario Finance Ministry at 1-800-263-7965.

These four portions added up together total the LTT payable.
A simple formula is as follows:
**Purchase Price Calculation of LTT
$0 to $55,000 .005 x purchase price
$55,001 to $250,000 (.01 x purchase price) minus 275
$250,001 to $400,000 (residential)
$250,001 plus (business) (.015 x purchase price) minus 1525
$400,001 plus (residential only) (.02 x purchase price) minus 3525
** If the purchase price falls within this range, then apply the appropriate formula to the purchase price. For example on a $200,000 property, the LTT calculation would be [(.01 x $200,000) minus 275 = $1725].

 

Article courtesy of TREB www.torontorealestateboard.com