Ontario has announced plans to double the tax rebate available to people buying their first homes.
The housing market has been booming in Ontario: when calculated as a share of gross domestic product, residential investment has increased from 4.8% in 2000 to 7.9% in 2015. Although those who are already homeowners have benefited from rising prices, it is becoming increasingly difficult for young families and others looking to gain a foothold.
Kathleen Wynne's Liberal government released its 2016 Economic Outlook and Fiscal Review on November 14, and announced plans to double the maximum refund of the land transfer tax (LTT) for first‐time homebuyers from $2,000 to $4,000, effective January 1, 2017. This means that no LTT will be payable on the first $368,000 of the cost of a first home, an increase of over the current $140,000 threshold. The government calculates that this would mean that more than half of first‐time homebuyers would pay no LTT.
"The housing market is an important source of economic growth and employment in Ontario," said Ontario Finance Minister Charles Sousa in his statement to the legislature. "And improving housing affordability will help more Ontarians to participate."