Buying a home for anyone can be a confusing process as there are so many aspects to consider. The fun part is the actual shopping for a home but, this has even become a much more difficult process. Many homes, especially in the first time home buyer’s market, are being sold in multiple offer situations.
The soaring home values throughout the year have made buying a home even more difficult for a young buyer and pushed it out of reach for some. For example, in the Greater Toronto Area the average price for all properties this October was $763,000. Home prices in Hamilton have grown to an average of $535,000 and homes in Barrie are averaging at $476,000. Many buyers have had to change their expectations in order to get their foot into the door of home ownership. This has been accomplished by either changing the location of search or by buying a smaller product.
It should come as no surprise that these soaring house prices are boosting the government coffers as the revenue from land transfer tax is up 15 per cent more than the forecast in the budget from February of this year.
Finance Minister Charles Sousa announced changes to the Land Transfer Tax in his fall economic statement, delivered in the provincial legislature on Monday afternoon. The changes are to take effect Jan. 1, 2017. “Purchasing your very first home is one of the most exciting decisions in a young person’s life, but many are worried about how they will be able to afford their first condo or house” he told the Legislature Monday. Sousa said, “Improving housing affordability will help more Ontarians to participate in the housing market”.
Sousa said first time buyers won’t pay any land transfer tax on the first $368,000 of the purchase price. They will become eligible for a rebate of up to $4000 in provincial land transfer tax, levied on the purchase of every house and condominium. Meanwhile, the land transfer tax rate on the amount of a purchase above $2 million will rise from the current rate of 2 per cent to 2.5 per cent. These changes will not push anyone up the ladder or change the affordability but, it offers a boost to young buyers and their families and hopefully leading them into home ownership in the very near future.
