The Government keeps changing up rules and on January 1, 2017 those of you in Ontario, will see 3 new rule changes – some good and some bad!
Change # 1 – There will be an increase in the First Time Home Buyer rebate from $2,000 – $4,000, effective January 1, 2017. This is great as it offsets the reduction in buying power, we saw with the latest mortgage rules. However, the deal must close AFTER January 1, 2017. If your deal is set to close this month, ask your lender to delay the closing so you can take advantage of this new rule.
Change # 2 – There is a clear distinction as to who qualifies and who does not qualify for the rebate.
- If you owned a home previously you don’t qualify – even if that home is in another country;
- You can only claim this rebate if the home is owner-occupied and not a rental;
- If you are married but your spouse owned a home, while also married than you cannot qualify but if your spouse sold their home prior to getting married to you, then you can qualify;
- You must be a Canadian citizen to qualify – however if you are currently a permanent resident and receive your status within 18 months after closing, you can then apply for the rebate.
Change #3 – For most of us this will not apply, however there will be some Land Transfer Tax increases effective January 1, 2017, such as:
- For any commercial, industrial, apartment building or even vacant land above $400,000 the tax rate will increase from 1.5% to 2.0%.
- If you buy a house or duplex that costs more than $2,000,000, the tax rate will increase from 2.0% to 2.50%.
However if your Purchase agreement is dated prior to the date of November 14, 2016 than the older tax rates still apply, regardless if you close after January 1, 2017.
Questions remain whether changes will come to the Toronto Land Transfer Tax. Tory has already announced that property taxes will be rising by 2% so I anticipate that further changes could come.
I can imagine that if you are looking to buy in the near future that you are worried not only about rising rates and new mortgage rules but now changes to the new land transfer taxes.
There are always solutions – work with me today to find a solution that works for you!