The Ontario government is moving to double the maximum tax rebate offered to first-time homebuyers while boosting the land-transfer tax on house purchases above $2 million.
Finance Minister Charles Sousa made the announcements in his fall economic statement, delivered in the provincial legislature on Monday afternoon. The changes are to take effect on Jan.1, 2017.
“Purchasing your very first home is one of the most exciting decisions in a young person’s life, but many are worried about how they will be able to afford their first condo or house,” he told the Legislature Monday. “Improving housing affordability will help more Ontarians to participate [in the housing market].”
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Sousa said first-time buyers won’t pay any land transfer tax on the first $368,000 of a purchase price, and they will become eligible for a rebate of up to $4,000 in provincial land transfer tax, levied on the purchase of every house and condominium. Meanwhile, the land-transfer tax rate on the amount of a purchase above $2 million will rise to 2.5 per cent, from the current rate of 2 per cent.
Government officials say the tax increase on luxury homes will bring in about $105 million annually, and that will fund the increased rebate.