First Time Home Buyers in Ontario Get Higher Tax Refund
With the increasing prices of real estate in Toronto, the refund of up to $4,000 for first time home buyers, which is effective by Jan. 1, 2017, is a move by the government to help young members of the community to purchase a home. This is a small step towards easing the hesitation felt by many regarding whether or not they can afford their first real estate purchase.
The refund, slated to be up to $4,000, should offset the land-transfer tax from the first $368,000 off the home price of a first time home buyer. This is almost double the previous amount of tax refund for these buyers. The average price of a home is at $762,975, starting at $429,407 for a condominium and priced significantly higher for a detached house now at over $1M. However, marketers see this amount as too little to really have an effect. It is, however, recognized as being just an incentive and will not really be a consideration in the purchase decision.
Although this refund is restricted to Canadian citizens and permanent residents, foreign investment is still widely encouraged. Ontario's recent refusal to impose taxes on foreign real estate buyers as British Columbia has done, highlights this. To compensate for the increased rebate, there will be an increase in the land-transfer tax for homes priced over $2M, from 2% to 2.5% and from 1.5% to 2% for non-principle residences.