Insights & advice
Land transfer tax rebates for first time homebuyers
December 2021 – 15 min read
Land transfer tax rebates are available to help first-time buyers with the cost of home ownership.
These rebates are available in Ontario, British Columbia, Prince Edward Island, and the City of Toronto.
Provided you meet the criteria set out by each province or municipality, you could receive a partial or full land transfer tax refund.
What is a land transfer tax (LTT) rebate?
If you’re buying your first homeOpens in a new window, you know that every penny counts when it comes to making the most of your budget. One way to help with the cost of buying a property is to look into any land transfer tax rebates you could claim.
In some provinces and cities, when you buy a property, you’ll pay land transfer tax as part of your closing costsOpens in a new window. If you’re a first-time buyer, you may qualify to receive some or all of this tax back. The amount you could receive will depend on the province and in some cases the city that you buy in.
How do you qualify for a land transfer tax rebate?
You can qualify for a LTT rebate if you buy a home in:
- British Columbia
- Prince Edward Island
In Ontario, you can also claim a separate rebate if you buy in the City of Toronto.
To claim a LTT rebate, you must be a first-time homebuyer, meaning you’ve never owned a home before. As such, you can only claim this rebate once. Depending on the province or municipality, there’s other criteria that needs to be met.
To be eligible for this provincial LTT rebate, you must be a Canadian citizen or permanent resident and over 18 years of age. If you have a spouse, they must not have owned a home in the time they’ve been your spouse. You must also live in the home within 9 months of purchasing it.
You must apply for the rebate within 18 months of the transfer date, and the maximum provincial LTT rebate is $4,000. The rebate will cover the full amount up to a maximum purchase price of $368,333. For homes over $368,333, you’ll still receive the maximum rebate but will be responsible for paying any tax still owing.
In Ontario, if you’re buying with a spouse who is not a first-time buyer, you may be eligible to receive a partial rebate of 50%.
Jessica is buying her first home in Hamilton, Ontario, for a purchase price of $400,000. The total land transfer tax payable is $4,475, but as Jessica qualifies for the full rebate amount of $4,000, she only needs to pay $475 to cover the remaining balance.
In Toronto, you can claim a Municipal Land Transfer Tax (MLTT) rebate in addition to the provincial rebate. This rebate is available on both new and resale residential properties, and you must meet all the same provincial criteria to qualify. However, if you’re not a Canadian citizen or Permanent Resident when you purchase the property but will become so in 18 months of the property purchase, you can qualify and apply for the MLTT rebate.
The maximum MLTT rebate amount is $4,475. The rebate will cover the full amount on a property price of up to $400,000. The same as the provincial rebate, you’ll receive the full rebate on properties valued over this price and will need to pay the remainder of the land transfer tax.
Sonny and Meera are purchasing their first home in Toronto, Ont. Their home costs $850,000, and they qualify to receive a rebate from both the province ($4,000) and the city ($4,475). The total land transfer tax is $18,475, but after receiving their full rebate amount of $8,475, the amount left to pay comes to $10,000.If you’re buying with a spouse who is not a first-time buyer in Toronto, you can apply for a partial rebate of 50%.
To qualify in BC, you must be a Canadian citizen or permanent resident buying a property that will be used as your principal residence (not a rental property or holiday home). If you’re not a citizen or permanent resident at the time of purchase but you become one before the first anniversary of the registration date, you can apply to receive a property transfer tax refund.
You must have lived in the province for 12 consecutive months immediately before buying your property or you’ve filed at least 2 income tax returns in B.C. within the past 6 years. As the rebate is on home you plan to live in and not rental properties, you must move into the home within 92 days of buying it to qualify.
The amount you receive will depend on your property size and price. If you purchase a property under $500,000, the rebate will cover the full amount, meaning you’ll have no transfer tax to pay. If you buy a home with a purchase price between $500,000 and 524,999, you can apply for a partial rebate, and there’s no rebate available for homes bought over $525,000. You need to apply for the rebate within 18 months of the transfer date.
If you’re buying with a spouse who isn’t a first-time homebuyer, and the property is valued between $500,001 - $524,999, you could receive a partial rebate.
In Victoria, Mike is buying his first condo for $500,000. He qualifies for a full rebate of $8,000, so there’s no land transfer tax to pay. Meanwhile Rojesh is buying a property in the same city for $520,000. The land transfer tax payable is $8,400, and Rojesh receives partial rebate of $1,680, meaning he needs to pay the remaining balance of $6,720. Cindy bought a condo for $525,000 in Kelowna, but as this is over the provincial threshold, she doesn’t qualify for a rebate and must pay the full tax amount of $8,500.
Prince Edward Island
If you’re a first-time buyer in PEI, you can claim a land transfer rebate if you’ve lived in the province for 6 consecutive months immediately before buying the property, or you’ve filed at least 2 income tax returns in the PEI within the past 6 years. You must be over 18, a Canadian citizen or permanent resident, and the maximum amount you can receive is $2,000. If you’re buying with a spouse, you both need to be first-time buyers in order to claim this rebate.
If you purchase a home for under $30,000, there’s no land transfer tax due. If you purchase a property between $30,000 and $200,000, you’ll receive a full rebate, and the rebate does not apply to homes purchased for more than $200,000 (meaning you’ll need to pay the full amount of transfer tax).
Lauren is buying her first home in Charlottetown. As the property price ($196,000) is under the $200,000 threshold, Lauren can receive a full rebate and will pay no land transfer tax.
Claiming a land tax rebate
The process of claiming a rebate will vary depending on where you’ve bought your property. If you live in Ontario or B.C., your real estate lawyer will help you to file the necessary paperwork. If you live in PEI, visit their websiteOpens a new website in a new window - Opens in a new window to download and complete the First Time Homebuyers Declaration form to apply.
Other programs and incentives
The land transfer tax rebate is one of many different first-time homebuyer programs and benefitsOpens in a new window that are available:
The First-time homebuyer incentive (FTHBI)
Provided by the Canada Mortgage and Housing Corporation (CMHC), the programOpens in a new window offers eligible homebuyers a shared-equity mortgage with the Canadian government.
The first time homebuyer credit
Known as the HBTCOpens in a new window, this offers first-time buyers a $5,000 non-refundable income tax credit.
The GST/HST New Housing Rebate
This rebate allows you to claim back some of the GST or the federal HST you paid for your new home.
Making the most of the rebates and benefits available to you can help you with the cost of purchasing your first home.
The above example is for illustrative purposes only. Situations will vary according to specific circumstances. This material is for information purposes only and shouldn’t be construed as providing legal or tax advice. Every effort has been made to ensure its accuracy, but errors and omissions are possible. All comments related to taxation are general in nature and are based on current Canadian tax legislation and interpretations for Canadian residents, which are subject to change. For individual circumstances, consult with your tax, legal or accounting professionals. This information is provided by The Canada Life Assurance Company and is current as of date of publication.