When buying a home, many people overlook the significant cost of land transfer tax. Almost always, the land transfer tax forms the largest portion of your closing costs. But if you are a First Time Home Buyer, you may be in luck as certain provinces, like Ontario, Quebec, BC and PEI, offer rebates to help you save money on the purchase of your first home.
Our calculator shows you how much you can expect to pay and why. If you are a first-time home buyer, we show you how much you can expect to save in government-sponsored rebates, reducing the impact of your land transfer fees.
Toronto is the only city in Ontario that levies a municipal land transfer tax.
Ontario levies a land transfer tax by applying a tax-bracket system to your property’s purchase price. The full breakdown of your provincial land transfer tax is shown below.
|Tax Bracket||Marginal Tax Rate||Marginal Purchase Price||Marginal Tax|
|$55,00055k to $250,000250k||1.0%||×||$||195,000195k||=||$||1,9501.95k|
|$250,000250k to $400,000400k||1.5%||×||$||150,000150k||=||$||2,2502.25k|
|$400,000400k to $2,000,0002.00m||2.0%||×||$||100,000100k||=||$||2,0002.00k|
Ontario offers a land transfer tax refund of up to $4,000 for first-time home buyers.Since your provincial tax exceeds the rebate limit, your provincial rebate is capped at $4,000.
Each province has their own definitions of a First-Time Home Buyer. Generally:
You may claim an immediate refund (or exemption from the tax) at the time of registration.
Yes. You may have up to an 18 month period after the registration of your new home to apply for a refund.
Yes, in certain cases. After the purchase of a property, you have an 18-month window following registration to obtain a rebate. If you gain citizenship or permanent residency during this period, you can claim the full rebate amount.
Ontario offers a land transfer tax refund of up to $4,000 for first-time home buyers.
BC requires its home buyers to pay a Property Transfer Tax (PTT) when purchasing a new home. The tax is valued at:
There are several conditions that would allow you to be exempt from this tax. Foregin buyers have to pay an additional 15% of the tax.
If you are a first-time home buyer, British Columbia offers a land transfer tax refund for properties worth below $500,000. The refund covers the full tax amount if your asking price is $475,000 or below. Otherwise, the refund is partial.
For more information, see the official regulations.
Quebec charges a Land Transfer Tax called the Welcome Tax that is different for Montreal but the same for the rest of Quebec. It increases to up to 1.5% for property valued over $258,600 and for Montreal increases up to 3.0% for property valued over $2,000,000.
The rates above are accurate for fiscal year 2020. You are exempt from the land transfer tax if your property is worth under $5,000, or if you are transferring the property to an immediate family member.
The Montreal Home Ownership Program provides financial assistance to first-time home buyers amongst other tax-exemption possibilities. You may qualify for both a land transfer tax rebate as well as a lump-sum subsidy when purchasing your first home in Montreal. For your convenience, we have provided the table below.
|Home-Buyer Requirements||Eligible Property Values||Lump-Sum Payment||Welcome Tax Refund|
|Single Buyer without Children||Under $200,000||$2250|
|Household without Children (More than one buyer)||Under $250,000||$2250|
|Households with minimum one child under 18||Under $280,000 (Increases up to $360,000 if property has more than 3 bedrooms)||$5,000 (Increases up to $6,250 if property has living spaces of more than 1033 square feet)||100%|
|Households who already bought property prior to 2018 and has at least one child under 18||Under $360,000 (Must have more than three bedrooms)||100%|
The PEI transfer tax exemption waives the property transfer tax for first-time home buyers. You must have resided in PEI for 183 consecutive days before purchasing your home, or have occupied your new purchased home for at least 183 consecutive days.
There is no limit on the purchase price for first-time home buyers to receive a refund. Prior to 2016, the purchase price limit to be eligible for the refund was $200,000.
Non-first-time home buyers are also exempt from PEI’s real property transfer tax if the cost of the property being transferred is below $30,000.