For a first-time buyer purchasing a $400,000 home in Ontario outside the City of Toronto, what is the provincial land transfer tax before and after the maximum first-time refund?
Correct Answer
C) $4,475 before the refund and $475 after it
The Ontario brackets give $275 + $1,950 + $2,250 = $4,475 on $400,000. The first-time purchaser refund under s. 9.2 of the Land Transfer Tax Act is capped at $4,000, leaving $475 payable.
Why This Is the Correct Answer
Step one: $275 on the first $55,000, $1,950 on the next $195,000 and $2,250 on the next $150,000, for $4,475. Step two: subtract the $4,000 maximum refund, leaving $475.
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A first-time buyer purchases a $400,000 home in Ontario outside the City of Toronto and qualifies for the provincial first-time refund. How much land transfer tax is payable after the refund?
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