Humber/Ontario Real Estate Course 2 Exam Practice

Which of the following statements about the provincial land transfer tax is correct?

1. Typically payable when a purchase agreement is signed

2. Varies as a flat fee regardless of sale price

3. One of several closing costs paid by the buyer

4. Refundable for first-time home buyers

5. Pays for legal fees associated with land registration

6. Funded by the seller

The correct answer is: Refundable for first-time home buyers

The statement that the provincial land transfer tax is refundable for first-time home buyers is correct because many jurisdictions offer a refund or rebate to support first-time purchasers in entering the housing market. This financial assistance aims to alleviate some of the burdens associated with home buying, recognizing that first-time buyers often face significant expenses. First-time home buyers may qualify for this rebate based on specific criteria set forth by the provincial government, which intends to promote home ownership and assist those who have not previously owned property. This incentive reflects a broader effort to make real estate more accessible to new buyers, thus fostering homeownership. While other options may address aspects of the land transfer tax, they do not accurately convey the refund policy applicable to first-time buyers, which is a significant benefit for that demographic.