Thursday, February 01, 2007

Is the Land Transfer Tax (LTT) Rebate Program for You?


Land Transfer Tax (LTT) Rebate Program In Canada

How the Program works

This program is for First-time home buyers who purchase a newly constructed home will receive a rebate of the Land Transfer Tax (LTT). All other buyers will continue to pay the full applicable tax. The maximum LTT rebate is $2,000.

Details of the program

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 newly built 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 or access through

www.gov.on.ca/FIN/english/bke-ltt.htm

These four portions added up together total the LTT payable. As 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 (.015 x purchase price) minus 1525

$250,001 plus (business)

$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 = $1,725].

Or use my online land transfer tax calculator

Make the Right Move. Consult a Toronto Real Estate Board REALTOR.

www.TorontoRealEstateBoard.com

Read more about Land Transfer Tax here:

I have an online land transfer tax calculator at my site
For more information please contact A. Mark Argentino

A. Mark Argentino Associate Broker, P.Eng.,
Specializing in Residential & Investment Real Estate
RE/MAX Realty Specialists Inc.
2691 Credit Valley Road, Suite 101, Mississauga, Ontario L5M 7A1

BUS 905-828-3434
FAX 905-828-2829
E-MAIL mark@mississauga4sale.com
Website: Mississauga4Sale.com

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