What happens to the first-time buyer LTT rebate if my co-buyer has owned a home before?
If you are purchasing a home with a co-buyer and only one of you qualifies as a first-time buyer, the Ontario land transfer tax rebate is prorated based on the qualifying purchaser's proportionate interest in the property.
For example, if you are each acquiring a 50% interest and only you qualify as a first-time buyer, you are entitled to 50% of the maximum rebate amount. Your co-buyer's prior home ownership does not disqualify you from claiming your share, but it does prevent you from claiming the full rebate.
The practical impact is that co-purchasers in this situation receive a reduced rebate compared to what two qualifying first-time buyers would receive. Toronto buyers face the same proration rule for the municipal MLTT rebate. Plan ahead — understanding this before making an offer helps you budget accurately for closing costs and avoids surprises on closing day.
Key takeaways
- If only one co-purchaser qualifies, the rebate is prorated to that person's interest.
- Both buyers qualifying means the full rebate applies.
- The same proration rule applies to Toronto's MLTT rebate.
- Know your co-buyer's ownership history before budgeting for closing costs.