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BMO Land Transfer Tax Promotion

BMO BMO is one of the more creative mortgage marketers.  In their latest bag of tricks they’ve pulled out a nifty tax incentive.

If you get a 5+ year fixed mortgage on a Toronto property, and close by February 29, 2008, BMO will pay your land transfer tax (up to a maximum of 1.5% of your mortgage amount).

On a $400,000 house, that would save you $3,725.

For buyers rushing to avoid Toronto’s new tax by December 31, 2007, this gives them another option.

Here’s the fine print:

  • To qualify (according to 680 News) you apparently have to do your primary banking at BMO, or switch to BMO. 
  • It remains to be seen if BMO’s interest rates will be competitive during this offer. The Toronto Sun quotes the interest rate as a “special promotion” rate of 6.38%.  (Rates are currently under 6% at most non-bank lenders.)
  • Since Toronto’s land transfer tax doesn’t take effect until February 1, 2008, this deal mainly applies to people who close in the month of February.
  • BMO will pay a maximum of $15,000 in tax.

One more thing to remember:  If you’re a first-time buyer you’ll pay no land transfer tax on the first $400,000 of home value.  BMO will reportedly pay your tax anyway in this case, and let you keep the rebate.

Ed.:  Read the comments below for further opinions.