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                          The Ontario Land Transfer Tax Refund   

              By: James B. More LLB.


First time homebuyers in Ontario are entitled to receive a land transfer tax refund up to $4,000.00.

To obtain the refund the purchaser cannot have ever owned a home, or an interest in a home, anywhere in the world and must occupy the home as their principal residence within 9 months of the property being transferred to them.

In addition, the spouse of the purchaser cannot have owned a home, or an interest in a home, anywhere in the world , while being the spouse of the purchaser.

The refund may be obtained at the time of closing of the purchase.  In effect the amount of tax paid at the time of closing is reduced by the amount of the refund.

For example, if the purchase price of a home is $ 375,000.00 ( net of any provincial and federal taxes payable on the purchase ) the land transfer tax of $ 4,100.00 would be reduced by   $ 4,000.00 to $100.00.

If a parent who is not a first time homebuyer and a child who is a first time homebuyer purchase a home with equal 50/50 interests the child may claim a refund up to $2,000.00.  If the parent has only a 10 % interest in the home the child could claim a refund up to 90 % of $4,000.00 ( $ 3,600.00 ).

A purchaser who has never owned a home before, anywhere in the world, may claim up to the full $4,000.00 refund provided that the spouse of the purchaser has not owned a home, anywhere in the world, while he or she was the spouse of the purchaser.

If the spouse of the purchaser owned a home before, anywhere in the world, before becoming the spouse of the purchaser but not while being the spouse of the purchaser, the purchaser may claim up to the full $4,000.00 refund even if the spouse of the purchaser is acquiring an interest in the home being purchased.

It is only the spouse who has not owned a home before, anywhere in the world, that can claim a refund and only if their spouse has not owned a home before, anywhere in the world, while they were spouses.

If either spouse has owned a home, anywhere in the world, while they were spouses neither spouse can claim a refund.

Spouse means either of two persons who are married to each other, or who are not married to each other and have cohabited continuously for a period of three years, or cohabited in a relationship of some permanence if they are the natural or adoptive parents of a child.

This is a short summary of the Ontario Land Transfer Tax Refund.  Purchasers should consult a solicitor for advice and / or refer to the Ontario Land Transfer Tax Act and it’s regulations.