NEWS UPDATE: Federal Government Raises Insured Mortgage Cap to $1.5M, Expands 30-year Amortizations
New Tax Break For 1st Time Homebuyers in Ontario
Ontario’s Finance Minister, Charles Sousa, made the following statement a couple of weeks ago, “Purchasing your very first home is one of the most exciting decisions in a young person’s life, but many are worried about how they will be able to afford their first condo or house,” he told the Legislature Monday. “Improving housing affordability will help more Ontarians to participate [in the housing market].”
The provincial government wants to double the maximum tax rebate offered to first-time buyers while boosting the land-transfer tax on house purchases above $2 million. The changes will be taking effect on the first day of the new year.
Sousa also added that first-time homebuyers won’t have to pay any land transfer tax on the first $368,000 of a purchase, and they become eligible for a rebate of upto $4,000 in provincial land transfer tax. This is levied on the purchase of every house and condo. However, the land transfer tax on a $2 million purchase will be 2.5%.
In the past, first-time buyers have expressed concerns about the difficulty of entering the housing market, but the government promise to take action about that. This is especially the case in the GTA, where prices are over $760,000.
The government is the only winner here, because these rising prices boosts its tax revenue; upto 15% now. This allows the province to take in almost $2.5 billion in land-transfer tax.
The Liberal government also announced it wants to freeze the property tax on apartment buildings while it reviews how it affects rental affordability; suggesting the prices for the municipality property tax are often a huge financial burden. They would be costing more than condos!
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