Rebate on Land Transfer Tax will increase to maximum of $4,000
By
Mark Schadenberg
The
average price of a home in Woodstock over the past 12 months is in the range of
$285,000, while the average reported sale price in October was actually over
$300,000.
I’ve
reported these numbers previously (links below), but as you can easily visualize the price of a home for
any buyer has increased steadily over the years. If you own your house, it’s
certainly an extremely solid investment and a place to call “home”.
If
you’re a first-time buyer the possibility of applying for a rebate on your
income tax after buying your first house has existed for a number of years, but
the maximum you could apply for when filing your tax return was $2,000.
The
Ontario government is keeping up with the times now by increasing the maximum
amount to $4,000 beginning on Jan. 1 of 2017.
The announcement was made today (Nov 14) by Provincial finance minister Charles Sousa.
Any change like this, should have
been retroactive to Jan. 1 of the year as it may delay a planned purchase by a
young couple or any first-time buyer.
The
mathematicians in the crowd might remember that land transfer tax is calculated
as 1% of the purchase price and then subtracting $275. The percentages change
somewhat when the selling price of a house surpasses $250,000.
See
the grid below:
Besides
Realtors, the Ontario Real Estate Association was also quick yesterday to post
its press release:
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Ontario
government gives tax break to first-time home buyers
New
LTT rebate will help more young families achieve their dreams of home ownership
TORONTO,
November 14, 2016 – In its 2016 Fall Economic Statement, the Government of
Ontario committed to increasing the land transfer tax (LTT) rebate for
first-time home buyers from $2,000 to $4,000. The new LTT rebate will help more
young families achieve their dreams of home ownership.
"Finding
an affordable home has become a struggle for thousands of young couples,” said
Ray Ferris, president of the Ontario Real Estate Association (OREA). “This tax
break will reduce a first-time buyer’s closing costs and help them save more
for their down payment.” According to research prepared by Altus Group
Economics for OREA, an improved LTT rebate will create 5,000 jobs and $268
million in economic spinoffs. Research shows that home ownership contributes to
families becoming happier and healthier, and enjoying improvements in their
children’s school performance.
“Home
ownership changes you for the better,” said OREA CEO Designate, Tim Hudak. “It
builds strong communities and stable neighbourhoods. A tax break for first-time
buyers will give a lot of young families the leg up they need to get into home
ownership.”
“Premier (Kathleen) Wynne and Finance Minister (Charles) Sousa deserve credit for taking positive steps to address
affordability,” said Hudak. “It’s encouraging news for that young couple
looking to get into the market. We look forward to continuing to work with the
government to improve affordability by looking at other issues impacting
prices, like supply.”
About OREA
Representing
the 67,800 real estate brokers and salespeople members of Ontario’s 40 real
estate boards, the Ontario Real Estate Association (OREA) serves its members
through advocacy, educational programs and special services. www.orea.com.
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HOUSE HUNTING
As I
mentioned above, the timing is unfortunate as someone saving to buy in early 2017 will be rewarded, but not the house hunter active right now.
Home
ownership should be affordable. It’s difficult to accumulate a good credit
score (Beacon rating), maintain low credit card and credit line debts, save for
a down payment, drive a reasonable car, and work hard enough to earn a good income.
When
you input numbers into an amortization chart after you calculate the amount you
can afford each month in a mortgage payment (Gross Debt Service ratio and / or
Total Debt Service ratio), then you may rely upon this land transfer tax rebate
increase to perhaps purchase that solid oak kitchen table and chairs you have
on your wish list.
TAKING FROM PETER TO ASSIST PAUL
The
Ontario Liberals will pay for the rebate by increasing the land transfer tax
due on homes above $2 million – upping the percentage from 2.0 to 2.5 for home
purchases by the wealthy.
Former
Conservative provincial leader Tim Hudak is incoming CEO of OREA. In a Toronto
Star story, he praised the change, saying “every break is
going to help out that young family.
“Home
ownership changes you for the better. It builds strong communities and stable
neighbourhoods," Hudak added in the OREA press release above.
The
Toronto Sun version of the land transfer tax changes, notes the average house
purchase in the GTA is now over $760,000 with an increase in the past 12 months
of more than 20%. The story did not define exactly where the GTA area perimeter
is, but that price truly depicts – in my opinion – how difficult it is to buy a
home within a 20-minute not-rush-hour drive to the CN Tower.
The average, as printed in the
Toronto Sun, in Barrie is $476,000.
Tim Hudak
GOOD NEWS FOR SOMEONE RENTING
FROM
TORONTO SUN:
Provincial finance minister Charles Sousa also announced a
freeze in the property tax on apartment buildings while the government reviews
how the tax burden affects rental market affordability.
He said the average
municipal property tax burden on apartment buildings is more than double — and
sometimes triple — that for condominiums. The government is concerned that
lower-income residents in apartment buildings are facing a much higher tax
burden than people who own condos.
“Many who are renters
in apartments are paying — indirectly — a lot more tax on those properties,”
said Sousa.
This is one of the
reasons why many owners of large apartment buildings have their ownership converted
to a condo status even though the inhabitants of the complex are tenants and
not owners.
LINKS:
Mark Schadenberg, Sales
Representative
Senior Real Estate Specialist
(SRES designation)
Royal LePage Triland Realty
Independently Owned & Operated, Brokerage
757 Dundas St, Woodstock
(519) 537-1553, cell or text
Email: mschadenberg@rogers.com
Twitter: markroyallepage
Facebook: Mark Schadenberg, Royal LePage Triland
Discussion . . . Direction . . . Determination . . .
Destination
Last month, I was inducted into the Woodstock Sports Wall Of Fame
for my many years of volunteering locally.
