Current Programs to Help First-time Home Buyers in Ontario
Wednesday Aug 30th, 2017
Are you tired of renting or living in your parents’ basement? Thinking it might be time to purchase your first home? Here are five provincial and federal programs that can help you ease your way into homeownership:
Home Buyers’ Plan
First-time home buyers have an opportunity to use their RRSP contribution towards a down payment, using the Home Buyers’ Plan (HBP). Under this federal program, you can withdraw up to $25,000 from any RRSP account, as long as those savings were deposited more than 90 days before your request to withdraw. Keep in mind, you have to pay back this interest-free loan over a 15-year period and any year you don’t make a payment, that annual sum is added to your income and taxed at your marginal rate. The good news is that couples can withdraw a total of $50,000 combined from their RRSP accounts, which can make a huge contribution towards a down payment. To qualify for the HBP you and your spouse must not have lived in a home owned by either person for the five years prior to using the HBP. To learn more, click here.
First-time Home Buyers’ Tax Credit
Home buyers who have not owned a home within the last four years may be eligible for the First-time Home Buyers’ Tax Credit (HBTC) through the Government of Canada’s Economic Action Plan. The credit is based on $5,000 multiplied by the lowest federal income tax rate for that year. To learn more, click here.
Land Transfer Tax (LTT) Refund
As a first-time home buyer, you can receive a refund from the Ontario government of up to $4,000of the land transfer tax you paid on your first home. To qualify for this refund, you must be 18 or older and you cannot have previously owned a home. Typically, your lawyer will apply for the fee as you finalize your real estate purchase, but if that doesn’t happen you have 18 months after the registration date of the sale.
GST/HST New Housing Rebate
First-time home buyers residing in Ontario are eligible for an HST tax rebate through the federal government. The program is designed to help with the federal portion of the HST new home buyers have to pay. You can find out if you’re eligible for an HST New Housing Rebate, as well as all necessary application forms on Service Canada’s website.
Energy Efficient Housing
Lastly, homeowners can take advantage of Energy Efficient Housing rebates – while not restricted to first-time home buyers, these rebates can certainly help first-time buyers. There are a variety of rebates both at the federal and provincial levels. For instance, Genworth Canada offers the Energy-Efficient Housing Program. With this program, home buyers purchasing an energy-efficient home or making energy saving renovations are now eligible for significant premium savings when Genworth Canada insurance is obtained. For eligibility requirements, please click here. The Canada Housing and Mortgage Corporation offers a similar rebate and can apply to a purchase or a renovation. Details can be found here.
With both federal and provincial governments offering a number of resources, grants and rebates to first-time home buyers, it’s a smart time to invest in your future by purchasing your first home in Mississauga or the Greater Toronto Area.
An experienced realtor, such as myself, can help set you on the right path. To be set up on a personalized home search or to learn more about my home buyer services, please feel free to contact me.