We know that legal matters can, at times, be confusing. We are happy to share some frequently asked questions. If you can’t find the answer you need, please give us a call.
Click on the questions below to expand and see the answers.
General
Do I qualify as a ‘First Time Home Buyer?’
You qualify as a first time home buyer if:
- You or your spouse or same sex partner have never been named on the title of a property (alone or with someone else) Please see the meaning of spouse in the L.T.T. Government website listed below.
- You have not owned property in Canada or anywhere else in the world.
For further details, please visit the Government’s website:
What do I need to know about entering into an Agreement to buy a newly constructed home from a builder?
Conditions: Ensure your Agreement has a clause conditional on your Lawyer’s review, financing and sale of your existing home, if applicable.
Deposits: Limit your deposit to the Tarion Deposit Protection of $40,000.00
Builder’s Adjustments: These are standard costs that may or may not be included in the Purchase Price of the newly constructed home you are purchasing.
a. Tarion New Home Warranty
b. Hydro, gas and water meter connections.
c. Lot levies and development charges
d. Landscape/ Tree planting charges
e. Driveway Paving
f. Other hidden adjustments
We offer a free review of your agreement as part of our service to you when we are retained. Make sure your Agreement to Purchase is conditional on your lawyer’s approval and we will ensure your best interests are protected.
H.S.T. : Does your Purchase Price referred to in the Purchase Agreement include H.S.T. or is H.S.T. in addition to?
If H.S.T. is included, the new housing rebate goes to the builder.
You pay H.S.T. if the property is an investment and not your principal residence.
Tarion New Home Warranty: Ensures that all new homeowners receive the new home warranty coverage entitled to you under the law. There is a fee you pay to have this warranty which is included in your builder’s adjustments as indicated above. This fee is based on your Purchase Price.
Critical Dates: Schedule included in your Agreement which outlines the closing dates and extension periods.
When do I need to Bridge Finance?
If buying before your Sale, in order to Bridge Finance you must have a firm, Sale Agreement.
a) Your Sale is after your Purchase or
b) Your Purchase or Sale is out of town
T.I.P. Thought Inspiring Process™
T.I.P. #1 - Buying or Selling Privately?
Selling Privately?
a) The Buyer will usually have the Offer/Agreement to Purchase prepared and gives you the Offer for acceptance. Before you sign back the Offer/Agreement to Purchase, bring it to us along with your Deed, Survey (if available), applicable Mortgage Statement and/or statements of any liens or other registered encumbrances for review by our lawyers to ensure your best interests are protected. It is always a very good idea to make the Agreement subject to/conditional on your lawyer’s approval. A small retainer is required and will be credited towards your sale transaction upon its completion. Ask us if you cannot locate your Deed or Survey. At this point, you have decided on the closing date, requisition date (for the benefit of the Buyer) chattels to be included (warranties as to the working order of chattels, fixtures and mechanical equipment may be requested by the Buyer however, it is up to you as the Seller whether or not they are given.)
b) Once the Agreement has been reviewed by your lawyer and accepted by all parties a deposit is given to your lawyer. The deposit must be certified funds (either certified cheque or bank draft) payable to Vanular Lawyers Professional Corporation in Trust.
c) Deposits we recommend are at least a $5,000.00 deposit for Purchase Prices up to $500,000.00, a $10,000.00 deposit for Purchase Prices up to $700,000.00 and a $20,000.00 deposit for Purchase Prices over $700,000.00.
d) Some Common Conditions:
Highly recommended: Financing – always conditional for 5-10 business days. Before the Buyer waives this condition, you can ask for a copy of the Mortgage Commitment which, if the Mortgage is approved, should not include conditions.
Inspection: Depending on the age of your home, the Buyer may request an inspection.
Status Certificate: If you are selling a condominium, the Offer to Purchase is usually conditional upon an up to date, satisfactory Status Certificate to be reviewed by the Buyer’s lawyer. It is common for the Seller to order the Status Certificate and pay the $100.00 fee.
Buying Privately?
a) Obtain a copy of the Seller’s Deed and Survey (if available/applicable)
b) Bring in the Deed/ Survey (if applicable/available) for accurate completion of an Offer to Purchase/Agreement along with details regarding the purchase price, closing date, chattels, rental items (for example: hot water tank), Mortgage approval and conditions you are requiring to be included such as sale of your home, inspection, Mortgage financing and Status Certificate, if applicable. Let us know if the home you are purchasing will be for investment purposes or if you will be residing there as your principal residence. There will be a retainer required to complete your Agreement.
c) Never give a deposit directly to the Seller. Deposits are usually held by the Seller’s lawyer in his trust account and this is reflected in the Offer to Purchase/Agreement. See deposit recommendations and payment guidelines in the Selling Privately section.
d) If you would like us to review an Offer to Purchase/Agreement which is already prepared, we highly recommend that you bring the Offer to Purchase/Agreement in to us for our review to ensure your best interests are protected before signing the agreement. A small retainer is required and is credited towards the completion of your Purchase transaction.
T.I.P. #2 - No Survey, No Problem!
If you are Selling:
a) Ask your real estate agent to exclude the survey clause in the Agreement.
b) Ask a neighbour. If you live in a subdivision, your adjacent lot to your neighbour’s may also be on their survey.
c) Go online to the Ontario Land Surveyors database to see if a survey exists for your property and includes all current buildings/structures for your property. The cost to order if one exists is approx. $250.00. www.landsurveyrecords.com
d) If your property’s legal description is Part of a Lot on a Reference Plan, ask your lawyer, as we may have access to a survey if the survey is available in the Teraview System where your property is registered.
e) Visit your Municipal office to see if they have a current survey on file for your property.
f) Offer to pay the cost of title insurance for the Buyer which will be approximately $300.00 versus approximately $1,000.00, if they are insistent.
If you are Purchasing:
a) If the Seller and his/her real estate agent have exhausted all of the above attempts, ask your agent to include a clause for the Seller to pay for the cost of title insurance for you and include a clause in the Agreement that indicates this credit on the Statement of Adjustments on closing. As discussed in option f) above. Keep in mind, you have to weigh the benefits of pursuing a $300.00 credit against the price you are offering to purchase the property and whether you are in a multiple offer situation.
Title insurance provides coverage for you for as long as you own the home against any risk/loss in value/claim that an up to date survey may reveal so that your interests are protected.
Land Transfer Tax/Municipal Land Transfer Tax Refund Program
Do I qualify and how do I calculate L.T.T. and M.L.T.T.?
L.T.T. (Ontario) Calculations:
As a qualified first-time home buyer of a new or resale home you will receive up to a maximum of $4,000.00 credit against your L.T.T. on closing. Please note that if you are putting another person on title who is not a first time home buyer, your rebate amount will be commensurate with the percentage of ownership you hold subject to the rules of the Land Transfer Tax Act.
Example: If you purchase a property jointly with a partner who is not a first time buyer, you will receive 50% of the rebate ($2,000.00) to reflect the 50% ownership you hold on title. If you purchase with a secondary party solely for the purpose of financing and hold title 99% yourself, 1% secondary party, you will receive 99% of the rebate ($3,960.00).
The Provincial Land Transfer Tax (LTT) Calculation Table is as follows:
Provincial Land Transfer Tax (Ontario)
0.5% from $0 to $55,000
1.0% from $55,001 to $250,000
1.5% from $250,001 to $400,000
2.0% from $400,001 to $2,000,000
2.5% from $2,000,000 onward
In other words,
Up To $250,000.00: My Purchase Price is: $200,000.00
Calculation is: 1% of the Purchase Price – minus $275
$2,000.00 – $275 = $1,725.00
$250,000.01 – $400,000.00: My Purchase Price Is: $325,000.00
Calculation is: 1.5% of the Purchase Price – minus $1,525.00
$4,875.00 – $1,525.00 = $3,350.00
Over $400,001 – $2,000,000: My Purchase Price Is: $410,00.00
Calculation is: 2% of the Purchase Price – minus $3,525.00
$8,200.00 – $3525.00 = $4,675.00
*(no additional taxes apply)
Over $2,000,001: My Purchase Price Is: $2,100,00.00
Calculation is: 2.5% of the Purchase Price – minus $13,525.00
$52,500.00 – $13,525.00 = $38,975.00
*(no additional taxes apply)
As a qualified First-Time purchaser purchasing a newly constructed or resale residential property home in the Municipality of Toronto with two or less single-family residences, the rebate applied on closing is up to a maximum of $4,475.00. Please note that if you are putting another person on title who is not a first time home buyer, your rebate amount will be commensurate with the percentage of ownership you hold subject to the rules of the Land Transfer Tax Act.
Example: If you purchase a property jointly with a partner who is not a first time buyer, you will receive 50% of the rebate ($2,237.50) to reflect the 50% ownership you hold on title. If you purchase with a secondary party solely for the purpose of financing and hold title 99% yourself, 1% secondary party, you will receive 99% of the rebate ($4,430.25).
The Toronto Municipal Land Transfer Tax (MLTT) Calculation Table is as follows:
Municipal Land Transfer Tax (Toronto)
0.5% from $0 to $55,000
1.0% from $55,001 to $400,000
2.0% from $400,000 onward
Per the rebate, First Time Buyers are exempt of this M.L.T.T. if you are purchasing a home with a purchase price of $400,000.00 or less. Please note that L.T.T. will still apply.
Please find the municipal government’s website at: www.toronto.ca/taxes or call them directly at 416-338-4829 for any further details or clarification.
Alternatively, please contact our office for further assistance at: (905) 427-4886
The above information are basic examples and are based on current rules pertaining to Land Transfer Tax Act per April 2017 and these are subject to change without notice. There may be further exceptions to these examples in the Land Transfer Tax Act based on your specific situation. We take no responsibility for errors and omissions in the above noted information.
Home Buyers' Plan
Can I use my R.R.S.P.’s and how do I do this?
Generally, before you can withdraw funds from your RRSP’s to buy or build a qualifying home, you have to meet the first-time home buyer’s condition.
You are not considered a first-time home buyer if you or your spouse or common-law partner owned a home that you occupied as your principal place of residence during the period beginning January 1 of the fourth year before the year of withdrawal and ending 31 days before your withdrawal.
If at the time of the withdrawal you have a spouse or common-law partner, it is possible that only one of you will be considered a first-time home buyer.
Answer a few questions to find out if you, your spouse or common-law partner are considered a first-time home buyer for 2010.
However, if you are a person with a disability , or you are buying or building a home for a related person with a disability or helping such a person buy or build a home, you do not have to meet this condition. See HBP Condition – Person with a disability.
Example In 2007, Paul sold the home that he had occupied as his principal place of residence for five years. He then moved into a rented apartment. In 2007, he met Jane and she decided to move in with him. Jane had been renting her own apartment, and had never owned a home.
Jane and Paul were married in August 2010. They wanted to withdraw funds from their RRSP’s to participate in the HBP in September 2010. Since Paul owned and occupied his home during the period beginning January 1 of the fourth year before the year he wants to make the withdrawal, he is not considered a first-time home buyer, so he cannot participate in the HBP in 2010.
However, Jane is considered a first-time home buyer, since she never owned a home and did not live with Paul during the period in which he owned and occupied his home as his principal residence. She can participate in the HBP in 2010, as long as all the other requirements are met.
If Jane does not participate in the HBP in either 2010 or 2011, Paul can participate in the HBP in 2012 as he will not have owned a home that he occupied as his principal place of residence since January 1, 2008. If they want to participate together in the HBP, they both have to wait until 2012 at which time they can withdraw funds under the HBP to buy or build a qualifying home.
Exception to the first-time home buyer’s condition
You do not have to meet this condition to participate in the HBP if any of the following situations apply to you at the time you make a withdrawal from your RRSPs under HBP:
- you are a person with a disability and you withdraw funds under the HBP to acquire a home that is more accessible, or better suited to your needs;
- you withdraw funds under the HBP to acquire a home for a person with a disability related to you by blood, marriage, common-law partnership or adoption, and the home is more accessible or better suited to the needs of that person; or
- you withdraw funds under the HBP and give those funds to a person with a disability related to you by blood, marriage, common-law partnership or adoption, to acquire a home that is more accessible, or better suited to the needs of that person.
Home Buyers' Tax Credit
How do I claim a $5,000.00 Tax Credit on my Income Tax?
You can claim an amount of $5,000 for the Home Buyers’ Tax Credit (HBTC) if both of the following apply: you or your spouse or common-law partner acquired a qualifying home; and you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer).
For more information on Line 369 and the Home Buyers’ Rebate, click here
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