December 16, 2007
Land Transfer Tax Rebates
Ontario Program (LTT)
First-time home buyers who purchase a new home will receive a rebate of the Provincial Land Transfer Tax (LTT). All other buyers will continue to pay the full applicable tax. The maximum Provincial LTT rebate is $2,000.
Details
The 1996 Ontario Budget announced a special one-year provision to the Provincial LTT that was renewed every year and is now a permanent program.
FIRST-TIME BUYERS who purchase a new home will receive a rebate of the Provincial 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 newlybuilt 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 Provincial 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 Provincial 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 Provincial Land Transfer 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.
Toronto Program (TLTT)
First-time home buyers who purchase a re-sale or newly constructed home will receive a rebate of the Toronto Land Transfer Tax (TLTT).
Details
The City of Toronto provides a rebate of the TLTT to first-time home buyers of re-sale or newly constructed homes.
The maximum Toronto rebate is $3,725 (equivalent to the TLTT payable on a $400,000 home).
According to the City of Toronto, eligibility rules for the TLTT first-time buyer rebate will mirror provincial rules, as follows: The purchaser must be at least 18 years of age.
The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.
The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world while he or she was the purchaser’s spouse. If this is the case, NO refund is available to either spouse. Note: If a purchaser’s spouse owned an interest in a home BEFORE becoming the purchaser’s spouse, but not while the purchaser’s spouse, the purchaser may be eligible for some rebate.
The tax is a percentage of value of the property based on a graduated scale:
- 0.5% of the amount of the purchase price up to and including $55,000, plus
- 1% of the amount of the purchase price between $55,000 and $400,000, plus
- 2% of the amount of the purchase price above $400,000
For additional information, contact the City of Toronto at 416-338-0338
Although we believe the above information is accurate it is not intended to be legal or financial advice. We accept no responsibility for any loss arising from any use or reliance on the information contained herein.
December 10, 2007
The home buyers’ wish list
Have you ever gone to the grocery store without a shopping list and come home with products that piqued your fancy — a bag of potato chips, perhaps, or a half-gallon of fudge ripple — but no coffee or bread or other item you know you needed? It’s okay; we have too.
But what’s acceptable in the aisles of the local Loblaws oe Sobeys is not such a good idea when you’re spending a hundred thousand dollars or more on a house. That’s why savvy home buyers make lists before they begin looking at specific houses. It’s a great tool for determining what you want, what you need, and what compromises you’re willing to make.
Your list can take many forms. Some buyers jot down the amenities they need (e.g., type of construction, number of bedrooms, a garage or fenced yard) and the amenities they want (e.g., a large kitchen or master bathroom with jetted tub). Others rank specific amenities along a continuum of desirability. Either way, such lists can go a long way in helping you determine just how important various features really are.
If you’re buying with a spouse or partner, have them make their own list — and be prepared to compromise on the differences. And if you’re working with a real estate agent, be sure to share your list(s) with them; they can search thousands of listings based on dozens of criteria. Either way, carry your criteria with you and compare how the houses you look at stack up.
But when everything else is right, it’s funny how you can forget all about something that you thought you absolutely needed.
If there’s one thing to remember about your list, it’s this: Don’t let your wants blind you to your needs. It’s all too easy to be dazzled by a big deck or master bathroom, for example, and completely miss the dimly lit bedrooms or lack of closet space.
Focus on what you want and you may overlook a home that fits your needs perfectly; focus on what you need and you may be able to add what you want down the road. (It’s a lot easier to add a deck than relocate a bedroom.)
Likewise, once you start looking at homes, don’t be surprised if you start looking at your list differently, too. Simply put, no home will meet all your criteria, and compromises are inevitable. Needs turn out to be wants, wants suddenly become needs, and no one but you can determine which is which. Update your list as you go along and you’ll eventually zero in on the amenities that really matter. Yes, it will be a compromise, but it will be one you can live with.
Other People’s Needs
Even when you’re buying a home, it’s a good idea to think like a seller. (You probably will be at some point.) To maximize your home’s appeal for future buyers, look for the amenities most other homebuyers say they want or need:
- An open floor plan
- Two or three bedrooms
- Two or more bathrooms
- Large kitchen
- Walk-in closets
- Energy efficiency
- Air conditioning (where appropriate)
- First floor laundry room
- Fireplace
- Covered front porch
- Level yard
Now let’s get to work on that list …
November 30, 2007
Greater Toronto Real Estate
Homebuyers across greater Toronto area went on a buying frenzy this year, setting a new record for housing sales, according to figures released yesterday. Maureen O’Neill, president of the Toronto Real Estate Board, said that may just be a taste of what is to come as home and condominium buyers rush to close deals ahead of the city of Toronto’s new land transfer tax, which comes into effect early in the new year.
“January or February is when we’ll really see the effects of the taxes,” she said. “After Feb. 1, everyone will have to pay the tax … [and] the months leading up to that is when we’ll see a real bump in people trying to get in before that deadline.”
The real estate board’s figures showed a 15% increase in sales across the Greater Toronto Area over last October, bettering the previous record for the traditionally mediocre sales month set in 2003 by 10%.
The board said there were a total of 7,915 single family homes sold last month, driving the overall figures for the year to 12% above those of last year and setting up 2007 as a potentially “banner year,” said Ms. O’Neill.
The North York neighbourhood of Willowdale saw a 67% bump in sales over the same period last year, while condominium sales in Etobicoke’s south Humber area pushed its overall sales to 60% above last October’s.
Bijan Baniasadi, a realtor with ReMax Metro Inc., has been selling homes in the Willowdale area for 11 years and said yesterday that he has not seen a market this overheated in a long time. “People are buying as fast as they can put the bricks one on top of the other,” he said. “A real rush is being created and the prices just keep jacking up.”
According to the real estate board, prices rose in October across the GTA to an average of $394,646, a 4% increase over the previous month. Mr. Baniasadi said in his area, bidding wars are becoming commonplace and prices are increasing because there are far more buyers than there are properties for sale. “Houses are selling for $700,000 that three years ago you could’ve gotten for $300,000,” he said.
But he has not heard buyers express concern about Toronto’s land transfer tax, passed by city council on Oct. 22 — at least not yet. “The tax is too new … it only happened a couple of weeks ago,” he said. “But it’s going to settle the market in the coming year, I think.”
Ms. O’Neill agreed. “I think it was a marginal effect on the October figures,” she said. “If I had to put a number on it I’d say maybe 5%.”
But she said the new tax, which includes an exemption for first-time homebuyers purchasing properties up to $400,000, ranges from 0.5% to 2%, depending on the price of the residential property, will eventually act as a major drag on Toronto home sales.
“I think it’s going to be a disaster for the city,” said Ms. O’Neill. “If buyers move just outside the Toronto boundaries, that will save them thousands of dollars and people buying homes watch those costs: they watch them very closely.”
The tax will add $3,725 to the price of a $400,000 home. The real estate board was one of the most vocal critics of the tax, which Mayor David Miller has said is necessary to cover a looming shortfall in the city’s budget next year.
Pickering had the strongest overall showing of GTA communities last month with a 34% increase in overall sales, including a doubling of the number of condominium sales.