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First-time buyer rebate applies to only one property

Q: My son bought two condos in 2011 at which time he had not owned any property and so claimed the first-time homebuyer rebate with respect to Land Transfer Tax offered by the Province of Ontario. I recently received a letter from the Ontario Ministry of Finance disallowing these rebates, along with penalties and interest. It stated in its assessment that because my son had not moved into the first property, he was not eligible for the rebate. Then with the second property, which he moved into, the Ministry stated he was no longer a first-time homebuyer. What can be done in this instance?

A: In Ontario, in order to qualify for the first-time homebuyer land transfer tax rebate, you have to be a first-time homebuyer and you have to move into the property within nine months of the closing date. Because your son did not do this, he is not eligible for the rebate. The second transaction is clearly a second purchase and therefore does not qualify for the first-timer rebate. Unfortunately, your son will owe the government both rebates that had been claimed, along with the penalty and interest on the outstanding taxes.

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