First time home buyers were once again the focus of another government proposal hoping to alleviate the financial burden of buying a house in a major centre.
On Monday afternoon, Finance Minister Charles Soussa unveiled a Liberal plan to double the rebate on the land transfer tax for first-timers in Ontario to $4,000 in an effort to help them enter the housing market.
Sousa said effective Jan. 1, first-time buyers won’t pay any land transfer tax on the first $368,000 of a purchase.
To keep the overall land transfer tax collection at $2.1 billion a year or better, the province will compensate for the rebate by placing a half-percentage point increase on homes purchased for more than $2 million.
The land transfer move was part of series of initiatives the Liberals revealed while reviewing the budget at the legislature.
The 2016 review also highlighted new investments in programs, and services. Including $140 million for better patient care at hospitals across Ontario, and $65.5 million being put into the creation of more child care spaces.
Sousa expects to balance the budget next year and the year after, with the deficit projected to be $4.3 billion in 2016-17, in line with the 2016 budget forecast.
However, the Liberals will be putting a hand into the reserve fund to help reach that goal. In the fall economic update, Sousa said unanticipated change will see the reserve slip from $1.1 billion to $700 million in 2017-18, with another $400 million to be used in 2018-19.
“We had to accommodate for it and as a result we used the reserve, as is common practice to do in any business, in any government, and it’s done often.” said Sousa.
Recent budget numbers have been contested by the opposition and the auditor general of Ontario. In October, the current AG said the Liberals deficit was more in the neighborhood of $8 billion rather than the projected $5 billion which included about $3 billion in pension plan money.
About $3 billion has been added in new expenses including the pension adjustment, $300 million to offset the first few months of the new energy rebate, an the aforementioned investment in patient care.
The provinces net debt to gross domestic product ratio is expected to rise to 40% for the coming year with the Liberal’s expecting a decline in 2017-18.