First Time Home Buyers and Stamp Duty Exemption

January 2014 – ISSUE 16

Far too often banks release funds for a mortgage for a piece of property to which the first time home buyer was not granted an exemption on stamp duty on the Conveyance and the Mortgage Deeds. This is very disappointing, especially when these additional costs were not included in your budget or your mortgage. Therefore, the first time home buyer would have to come up with additional funds, hundreds and sometimes thousands in order to have their deeds stamped. Further, if stamp duty is not paid within 6 months, an additional 15% of the price on the Conveyance and the Mortgage will be added to the original stamp duty amounts. If more than a year passes, the buyer would have to pay an additional 20%. As time passes, the cost of stamp duty increases. To avoid these types of situations, the Ministry of Finance has introduced a system wherein the financial institutions are able to apply to the Ministry to determine whether the proposed first time home buyer will be eligible for stamp duty exemption before proceeding with the transaction. This would make it easier for first time home buyers, the banks and their attorneys. Applicants are required to provide the Ministry with a certified copy of the Sales Agreement. It must be noted that the value of the transaction cannot exceed $500,000. In other words, the total consideration on the Conveyance and the Mortgage must total $500,000 or less.

Mikia S. Cooper, Associate

mcooper@halsburylawchambers.com