First-time homebuyers’ break on the land transfer tax will double under a new proposal by the Ontario government, but wealthy purchasers will pay the price once new land transfer rules come into effect Jan. 1, 2017.
Under the change, Ontario will double the maximum land transfer tax refund for eligible first-time homebuyers to $4,000. It means no eligible homebuyers in Ontario would pay land transfer tax on the first $368,000 of the cost of their first home.
Currently, Ontario residential property buyers — the city of Toronto has its own land transfer tax — pay 0.5 per cent tax on the first $55,000 of their purchase, one per cent on amounts from $55,000 to $250,000, 1.5 per cent on anything from $250,000 to $400,000 and two per cent on anything over $400,000. The proposed changes would increase the tax on the portion over $2 million to 2.5 per cent.
For now it does look like foreign buyer have escaped the wrath of the Ontario provincial government, said Doug Porter, chief economist of Bank of Montreal.