Here are the highlights of the proposed changes just announced by the Government of Ontario on November 14, 2016.
The maximum first-time home buyers refund for Ontario land transfer tax will increase from $2,000 to $4,000. The refund will only be available to Canadian citizens and permanent residents (see note below). Individuals will have 18 months after the transaction closes to obtain Canadian citizenship or permanent resident status.
For residential properties, the land-transfer tax rate on the value of the purchase price above $2 million will rise to 2.5 per cent, from the current rate of 2 per cent. This change does not affect multi-residential properties (e.g. an apartment building) but they will be affected by the change below.
Ontario businesses will see an increase of the Land Transfer Tax on certain real estate property from 1.5% to 2% on the portion of the value above $400,000. For example, this will affect commercial, industrial, multi-residential, and agricultural properties.
These changes take effect on transactions closing on or after January 1, 2017. The requirement to be a Canadian citizen or permanent resident will not apply to purchasers who entered into purchase and sale agreements on or before November 14, 2016.
Your Stern Cohen advisor can answer any questions or provide assistance to ensure you take advantage of these tax refunds.