Frequently Asked Questions

A) FIRST TIME BUYER BUYING FROM A BUILDER

Important information about the Ontario Land Transfer Tax Refund: Effective April 1, 2000, the Ontario Land Transfer Tax Act was amended making the refund to eligible first-time purchasers of newly constructed homes permanent so that it is no longer necessary (as it was in past years) to be concerned with annual renewals of the program.

NOTE: On December 13, 2007, the Ontario government’s mini budget announced that first time buyer Ontario land transfer tax refund (up to $2,000.00) will also be extended to resale homes provided that the offer was accepted on or after December 14, 2007: See below, FIRST TIME BUYER BUYING A RESALE HOME.

FIRST TIME BUYER OF NEW HOME: You must be a first-time home buyer of a newly constructed home or condominium registered with the Ontario New Home Warranty Program (ONHWP). Condo conversions (from older buildings) do NOT qualify! Your Agreement must have been accepted by the builder on or after May 8, 1996 and you must use the home as your principal residence.

NEVER OWNED A HOME: You (or your spouse) must be at least 18 years of age and never owned an interest in a home anywhere in the world (since you became spouses). Spouse includes a common-law spouse of three (3) years or more or where there is a natural or adoptive child between the common-law spouses. If, since becoming spouses, both spouses did not own a home, but one spouse owned a house which was sold prior to marriage (resulting in such spouse who did own a home being disqualified as a first-time buyer), the remaining first-time buyer spouse may claim total available refund (even if both spouses take title).

PARTNERSHIP PURCHASE (NON-SPOUSAL): If father and son buy a home (or any two non spouses) and one (only) is a first-time buyer with a 50% interest (for example), such first-time buyer can claim a refund of 50% of the Ontario Land Transfer Tax refund available being half of $2,000.00.

MAXIMUM REFUND: If your Agreement with the builder was entered into: i. on or before March 31, 1999, maximum refund is $1,725.00; ii. on or after April 1, 1999, maximum refund is $2,000.00.

INSTANT REFUND:

a). The refund is instantly available on closing of the real estate purchase. Any amount of Ontario land transfer tax above the allowed maximum refund must be paid on closing.

b) . Where a qualifying purchaser did not claim an immediate refund at time of a purchase closing, the tax will be payable at that time and a refund claim may be made directly to the Ministry of Finance. This application must be made within eighteen months of registration of the conveyance and no interest is payable on this refund. The following documentation must be submitted in order for a refund claim to be processed (if claim for refund was not made by purchaser’s lawyer, for the purchaser, at the time of closing):

1. A properly completed Ontario Land Transfer Tax Refund Affidavit form,
2. Copy of the registered transfer/deed,
3. Copy of the agreement of purchase and sale,
4. Copy of the statement of adjustments at time of completion of purchase,
5. Copy of the Tarion New Home Warranty Certificate.

B) FIRST TIME BUYER BUYING A RESALE HOME

In addition to first time buyers (who buy from a builder) being entitled to a land transfer tax refund of up to $2,000.00, first time buyers of resale homes will also now be eligible for a rebate of Ontario Land Transfer Tax of up to $2,000.00 on any resale home purchased in Ontario where the agreement of purchase and sale is entered on or after December 14, 2007. As of August /08, the refund is instantly available on the closing date.

Eligibility requirements for resale homes, is the same as for new builder homes:

– Purchaser must be 18 years or older – Must use property as principal residence within 9 months of closing – The spouse of the first time buyer must not have owned any residential property anywhere in the world during the marriage

In Ontario the Law Society requires all lawyers, when acting for purchasers and mortgagors, to inform clients about title insurance and its advantages and limitations and appropriateness in the circumstances of each individual transaction.

We have obtained title insurance on almost every purchase transaction in the last 7 years.

The cost of the title insurance is a one-time premium that is in addition to our base legal fee. The purchaser is covered for as long as they own the property and do not amend the ownership.

Title Insurance is an insurance policy covering certain conditions of title or ownership of real property at the time the policy is issued and is used to provide ownership protection for a purchaser against certain losses or damages suffered as a result of certain title problems.

For a one-time premium the policy protects the purchaser(s) and mortgage lender against certain losses suffered from matters set out briefly below as well as other matters more specifically outlined in the policy, which may include, but is subject to certain qualifiers and circumstances that are outlined in the insurance policy, the following:

• defects that would have been revealed by an up-to-date survey
• survey errors or illegibility of survey
• encroachments (before or after closing)
• contravention of municipal zoning by-laws
• unmarketability of title
• defects in the title
• invalidity or unenforceability of the mortgage on title
• liens
• easements (other than usual easements for utilities, etc.)
• contravention of subdivision, development and other agreements
• priority of certain construction liens
• priority of unregistered easements and rights of way
• fraud or forgery (prior to and after closing)
• solicitor error, omission or fraud
• unpaid property taxes or local improvement charges by a prior owner

In addition to policy coverage, the insured also receives:

• indemnity for actual loss or damage for the amount of the policy(being the price paid for the property) and automatically increasing (being the price paid for the property) and automatically increasing coverage (with inflation and rising property value) overtime to a coverage which can be double the price originally paid for the property. payment of legal fees and costs to address title issues a “no-fault” method to resolve title problems

No, the title search date is for the lawyer’s office to follow up with respect to search of property title and lawyers from both purchaser and seller will correspond with each other pertaining to this matter. However, it is important that the title search date be appropriately set when negotiating the Agreement and especially when making amendments such as making extensions to the closing date.

If property purchased is a freehold property (normally a house but some townhomes are condo town homes or parcels of tied land), fire insurance binder is required at the latest, the day prior to your closing date, but should in most cases be provided as soon as possible to prevent delays in funding because mortgage lenders require it. If property purchased is a condominium, we do not require any fire insurance binder but we strongly suggest you obtain content, liability, and home improvements insurance for your own protection.

Having supervised over 1 million refinance transactions our firm has streamlined and developed an efficient closing process. Our role here is a legal compliance function to ensure that the transaction closes quickly, legally and without issue. We act for both the borrower and the lender in most cases.

As a broker there in no additional liability as it pertains to the legal completion of the refinance transaction, unless you make false representations in the mortgage application. If involved in the signing program, your role will also involve verifying the identity of the client and witnessing their signature.