The great news for first-time buyers is that the government has various grants that you can take advantage of, making your home purchase more affordable. If you’re buying a home for the first time, here are some of the grants you have available:
The Home Buyers’ Tax Credit.
This is a rebate of approximately $750, at current tax rates. You must claim this credit within a year of purchasing your first home, and it’s a non-refundable credit. However, you’re home must “qualify” first. To apply and receive this credit, you’d include it on your personal income tax return. This is a great credit that allows you to recover some of your purchase costs.
Your property must “qualify”. Your home or property can be either new or existing, including detached, semi-detached and mobile homes, or condos, as well as other types of homes
You must live within the home within a year of purchasing it
Your home must be registered in either yours (or your spouse’s name) before you can claim the tax credit
This must be the first home where you’re considered the “homeowner” for at least 4 years prior
You must have documentation for your purchase and be able to provide it.
The Land Transfer Tax Rebate
Ontario First-time homebuyers can qualify for a rebate equal to the full amount of their land transfer tax, up to a maximum of $4,000. If you live in an Ontario city, then you’re eligible for the Land Transfer Tax Rebate. This is a rebate that is offered on both the provincial and municipal levels.
For instance, although the rebate amount varies depending on the province and city you live in, in Ontario land transfer tax rebates are available.If you also live in the City of Toronto, this municipality also offers the same rebate, which can be received in addition to the provincial Ontario rebate. The Toronto rebate is equal to the full amount of your municipal land transfer tax, up to a maximum of $4,475.
In order to qualify for the Ontario or Toronto Land Transfer Tax Rebates you must:
Be a Canadian citizen or permanent Canadian resident
Over the age of 18
Reside in the home within 9 months of purchase
Be a true first-time buyer, never previously owning a home before (this also includes your spouse/co-applicant)
The RRSP Home Buyer’s Plan
With the RRSP Home Buyer’s Plan, the government will allow you to withdrawal up to $25,000 from your RRSP if you are a first-time buyer, without it being considered as taxable income.
To be considered a “first-time homebuyer” you must:
Not have purchased or lived in a home within the last 4 years, that was “owned” by you or your spouse within
Be prepared to repay your borrowed down payment amount, which starts 2 years after purchase
Have the ability to pay of the borrowed amount within a 15-year period
The GST/HST New Housing Rebate
If you’ve purchased a new home, renovated an existing home, or rebuilt a home after a fire, and you paid GST or HST, then the GST/HST New Housing Rebate is for you.
The home must be your primary residence (this also includes floating, mobile and modular homes)
If you are a Canadian who qualifies, you can receive the GST portion of this rebate from the federal government. On top of this, if you live in Ontario then you’d also be eligible for the HST portion if you renovated or purchased a new home.
To learn more about these grants, plans and rebate, speak to an experienced mortgage agent.
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