First Time Home Buyer
Congratulations! You have made the right choice. Buying your home vs. renting has endless self rewards. Now that you have made that choice, here is what to consider next…
- What is your price range?
- What is the amount of down-payment you would like to invest?
- How much would you be comfortable paying on a monthly basis?
- How long do you think you will live in the home?
- When are you planning on making the move into your new home?
Once you have established these preliminary boundaries, it would be beneficial to speak with me; together, we can determine the optimal loan amount and program best suited to your needs.
Government Programs Help First Time Home Buyers
Home Buyers’ Plan (HBP)
This program allows you to withdraw up to $25,000 from your RRSP tax free to fund your purchase. If both you and your spouse qualify, you can each withdraw a total of $50,000. If you’re planning on using this program, make sure the money is in your RRSP for at least 90 days prior to closing.
- Qualifying: You or your spouse must not have owned a home in the last 5 years. You must have a signed agreement to purchase or build a home as your principal residence.
- Repaying: You have 15 years to repay the amount you “borrowed” from your RRSP. There are no interest charges. You have to repay 1/15, or more, of the total amount you withdrew each year. Learn more about how the HBP works.
Land Transfer Tax (LTT) Refund
You may receive a refund from the Ontario government of up to $4,000 of the land transfer tax you paid on your first home. Here’s how it works:
- You must be at least 18 years old.
- You cannot have previously owned a home, or an interest in a home, anywhere in the world.
- Your spouse cannot have owned a home, or an interest in a home anywhere while they were your spouse.
- You may receive the refund at the time you register your home purchase. If not, you must apply for it no later than 18 months after the registration date.
First Time Home Buyers’ Tax Credit (HBTC)
You or your spouse can claim this tax credit on your annual income tax return. The credit is based on an amount of $5,000. To calculate, multiply the lowest personal income tax rate for the year (15% in 2011 and 2012) by $5,000. For these years, the maximum credit is $750. Here’s how it works:
- You or your spouse must have acquired a qualifying home acquired after January 27, 2009.
- You cannot have lived in another home owned by you or your spouse in the year you buy your first home – or in any of the 4 preceding years.
HST New Housing Rebate
This rebate is available to to all buyers, not just first timers. If you’re buying a new home (new build) you can receive a 36% rebate of the federal portion of the HST, to a maximum of $6,300 on a home costing less than $350,000. Homes costing more than this receive less of a rebate and homes over $450,000 do not qualify. However, you can also apply for a rebate of 75% on the Ontario portion of the HST up to a maximum of $24,000. For more information, check out the federal website and the provincial site.