Applying The RRSP Home Buyer’s Rebate To Your Transaction
Buying a home is not something you do everyday, so you may not understand all the financial resources available by your bank or lending institution. At Blackburn Lawyers, we help clients throughout Richmond Hill understand how the first-time home buyer rebate applies to their transaction.
Qualifying For The First Time Home Buyer Rebate
First-time homebuyers may be eligible for a refund of all or part of the tax payable. Qualifying taxpayers may claim an immediate refund at time of registration.
The amount of the refund claimed will offset the land transfer tax payable up to a maximum amount of $4,000.00.
To be eligible for the rebate the purchaser must occupy the home as his or her principal residence no later than nine months after the date of the change of ownership. 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 (married or common law), 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.
Benefits For Spouses Buying A Home Together
In the case of spouses purchasing a home, a qualifying purchaser may also claim a refund in proportion to his or her interest if that purchaser’s spouse has owned a home before becoming the purchaser’s spouse, but not while that purchaser’s spouse. In other words, if spouses (married or common law) purchase a home and one has never owned a property before anywhere in the world and the other spouse has owned a property the eligible spouse can claim his or her share of the refund only if the other spouse sold the previously owned property before they became spouses.
In the case of non-spouses purchasing a property the refund will be reduced if one or more of the purchasers are not a first-time home purchaser. The refund will be proportionate to the interest acquired by the individuals who qualify for the refund.
For example, where a father who is not a first-time purchaser and a son who is a first-time purchaser, purchase a home with equal 50/50 interests, the son may claim a refund of 50% of the land transfer tax payable. The son’s claim cannot exceed 50% of the maximum allowable refund (i.e. 50% of $4,000.00).
In the City of Toronto
If you are a first-time purchaser of a newly constructed or re-sale residential property in the City of Toronto, the rebate is up to a maximum of $4,475.00.