Mortgages Tips for The Average Joe


Ways That Help You Avoid Land Transfer Taxes In Canada

Investors who want to purchase land or land interests in Canada have to pay land transfer taxes. Here, land includes already built structures, proposed buildings and their appliances. As a buyer, you need to pay transfer taxes before the purchase of the said land is sealed. Buyers are always after loopholes and chances that help them qualify for exemptions to pat these taxes.

Even though there are rebates and refunds, you need to know that there are smart ways you could follow and avoid paying land transfer fees. If you are transferring property to a spouse out of love, you will be exempted from paying transfer taxes. You will enjoy zero transfer tax obligation if you are transferring title as a trustee to a beneficiary. There are instances when the land transfer tax is exempted if the property is changing hands between an individual and their family business corporation.
You can keep land transfer tax costs at bay if you are transferring land that is not a party to a mortgage. There are transfers between spouses that are free from land transfer tax obligations. Land transfer tax does not apply to deals where the owner is bankrupt, and the land is part of his/her estate. If you are buying a newly built home, you stand a chance to avoid land transfer tax since the newly built home exemption qualifies you for such.

It’s good to note that a newly constructed home here refers to a house constructed on a parcel of vacant land. You won’t have to cater for land transfer fees if you are transferring to particular bodies and entities. You will avoid land transfer tax if you are dealing with a municipality, a trust body, schools or hospitals. In some states, first-time buyers are likely to avoid paying these taxes altogether, but they have to meet some requirements.

You only get land transfer tax exempted if you are past 18 years and you have occupied the home in under nine months since the sale was closed. Also, the first-time buyer or his/her spouse should show proof that they have never owned a home previously to qualify for the exemption. In some states such as Ontario, you need to have bought a home with a value of close to $227,500 or less if you are looking to avoid the tax.
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In Toronto, first time home buyers need to purchase property of up to $400,000 or less to get the exemption. Situations like divorce carry a lot of stress, but they will help you qualify for a free transfer. You are free from paying land transfer tax if you are transferring property to your spouse as long as there is a court order enforcing your separation.If You Think You Understand Lenders, Then This Might Change Your Mind