Ontario first-time home buyers can receive a rebate of up to $4,000 on the provincial land transfer tax. The rebate covers the full LTT on purchases up to roughly $368,000. Above that, the rebate is capped at $4,000 and you pay the difference. Your lawyer applies for the rebate as part of the closing process, so no separate application is required.

On a $500,000 purchase, the LTT is $6,475 and the rebate reduces it to $2,475. On a $700,000 purchase, the LTT is $10,475 and the rebate reduces it to $6,475. The savings matter most to first-time buyers who are already stretching to cover the down payment and the rest of the closing costs.

You must be at least 18 years old, a Canadian citizen or permanent resident, and you must never have owned a home or an interest in a home anywhere in the world. Your spouse must also never have owned a home while they were your spouse. The property must become your principal residence, and you generally must occupy it within nine months of the purchase.

If two buyers are purchasing together and only one qualifies, only the qualifying buyer's share applies. Two buyers purchasing equally where one is a first-time buyer would generally see the rebate halved to a maximum of $2,000. Confirm your own eligibility with your lawyer, since the rules have specific conditions.

The FHSA is a separate federal program that lets first-time buyers save up to $8,000 per year, to a lifetime maximum of $40,000, in a tax-advantaged account. Contributions are tax-deductible like an RRSP and qualifying withdrawals are tax-free like a TFSA. It does not replace the land transfer tax rebate. They are separate programs and you can use both, and FHSA funds can go toward your down payment and closing costs including the land transfer tax.

LTT applies to new construction and pre-construction purchases just as it does to resale. For pre-construction condos, the tax is paid on the closing date when title transfers, not when you sign the agreement of purchase and sale. That can be years after your original purchase, so budget for it well ahead. How HST is treated on a new build affects the calculation, so ask your lawyer to confirm the figure for your specific deal.

Transfers between spouses, whether adding a spouse to title or transferring title as part of a marriage breakdown, may be exempt from LTT under certain conditions. Where a mortgage remains on the property, the exemption can be affected by the value of the debt assumed. The rules here are specific and the outcome depends on the details, so have your lawyer confirm before registering anything.

There is no exemption or rebate for downsizers. If you sell a $1.6 million home and purchase a $700,000 condo, you pay the full Ontario LTT of $10,475 on the new purchase. The first-time buyer rebate does not apply because you have previously owned property.

This belongs in your downsizing math from the beginning. We include the land transfer tax in every net proceeds calculation we build for downsizing clients so the number is accounted for before any decisions get made.

Foreign nationals and non-permanent residents purchasing residential property in Ontario are subject to the Non-Resident Speculation Tax, currently 25% of the purchase price, on top of the regular LTT. It is a separate tax with limited rebate provisions, and separate federal restrictions on foreign purchases have also applied in recent years. If you are not a Canadian citizen or permanent resident, speak with a lawyer and an accountant before making any offer.

Transfers from a deceased person's estate to a beneficiary named in the will may be exempt from LTT under certain conditions, typically where the transfer is a direct bequest. Whether the exemption applies depends on the terms of the will and on any mortgage being assumed. Your estate lawyer will confirm. This matters for families inheriting a home and deciding whether to keep it or sell.