Help on the Way for First-time Homebuyers
Province Proposes New Initiatives to Improve Housing Affordability
Ontario will help more people purchase their first home through a proposal to double the maximum Land Transfer Tax refund to $4,000 for eligible first-time homebuyers, as of January 1, 2017.
Charles Sousa, Minister of Finance, along with Chris Ballard, Minister of Housing, were at Gateway Park in Toronto today to highlight the proposal, announced yesterday in the 2016 Ontario Economic Outlook and Fiscal Review.
If passed, the proposal would mean that no Land Transfer Tax would be payable on the first $368,000 of the cost of a first home, and more than half of first-time homebuyers would pay no Land Transfer Tax on the purchase of their home.
Ontario is taking further action to address housing affordability by proposing to:
- Freeze the municipal property tax on apartment buildings while undertaking a review of how the high property tax burden for these buildings affects housing affordability in the rental market.
- Modernize the Land Transfer Tax to reflect the current real estate market, including increasing rates on one or two single-family residences over $2 million. Revenue generated from proposed increased rates would be used to fund the enhancements to the First-time Homebuyers Refund.
- Residential investment as a share of GDP has increased to 7.9 per cent in 2015 from 4.8 per cent in 2000.
- The average purchase price for a first-time homebuyer in Ontario in 2015 was $375,000.
- In 2015, 99 per cent of single-family residence transactions in Ontario were below $2 million.
- Eligibility for the Land Transfer Tax refund for first-time homebuyers is proposed to be restricted to Canadian citizens and permanent residents. First-time homebuyers who become Canadian citizens or permanent residents within 18 months of purchasing a home could also apply for the refund.
- The average municipal property tax burden on apartment buildings is more than double that for other residential properties such as condominiums.
“We know that rising home values are a good thing for the provincial economy, but also a concern for a growing number of Ontarians. The government is committed to supporting an affordable and stable housing market while balancing the concerns of homeowners, first-time homebuyers and renters. Ontario is taking action to address housing affordability and to help people in their everyday lives.”
“We’re working to protect renters across the province, to make housing more affordable for all Ontarians and to ensure that Ontario continues to be the best place to live and raise a family.”