Ontario is doubling the rebate on the land-transfer tax for first-time homebuyers to $4,000, but is increasing the same tax on homes that sell for over $2 million.
The government says half of first-time buyers won’t pay any land-transfer tax to the province, while the half-percentage point increase on homes over $2 million will affect less than one per cent of the population.
The province takes in over $2.1 billion a year in the land-transfer tax, and the government says any increase in revenues from the increase on luxury homes will help pay for the doubled rebates for first-time buyers.
Premier Kathleen Wynne had said the government was worried about the difficulty faced by first-time buyers trying to get into the housing market, especially in the Greater Toronto Area where the average price is $762,975.
The government also announced it is freezing the property tax on apartment buildings while it reviews how it affects rental market affordability.
The changes to the land-transfer tax are outlined in the Ontario government’s fall economic statement, which says that home ownership has become a key factor in many people’s long term financial security.
The Ontario Real Estate Association had asked the government to expand the land-transfer tax rebate program for first-time buyers as one way to help more of them get into the housing market.
The city of Toronto has its own land transfer tax, which offers rebates of up to $3,725 for first time buyers.
Ontario’s land-transfer tax rises from half-a-per cent on the first $55,000 of a purchase price to two per cent for everything above $400,000. Toronto’s land-transfer tax is one per cent on the first $55,000 and two per cent on the rest.