In Ontario there are innumerable incentives for first-time homebuyers! Buying your first home is one of the largest investments of your life, and Ontario offers countless ways to aid and encourage first-time buyers. Canada’s Economic Action Plan introduced the First-Time Home Buyers’ (FTHB) Tax Credit and the expansion of the Home Buyers’ Plan to provide you with additional benefits and help you realize your dream of homeownership.
The RRSP Home Buyers’ Plan now allows first-time homebuyers to withdraw up to $25,000 from their Registered Retirement Savings Plans (RRSPs) for a home purchase, tax-free! With 15 years to repay it, many first-time home buyers take advantage of this opportunity and set up RRSP accounts well in advance, with the intention to reap the rewards when it is time to purchase a house.
The Land Transfer Tax Credit is a refund of the cost of Ontario’s land transfer tax up to a maximum of $2,000. This will allow first time homebuyers to purchase a home up to $227,500 without having to pay a land transfer fee. The refund can be given instantly at the lawyers office but advise the lawyer prior to the closing date if you qualify for the rebate.
If you want to call Toronto home, first-time homebuyers of a newly constructed or re-sale residential property qualify for the Toronto Land Transfer Tax Rebate. The maximum allowable rebate is $3,725, allowing first timers to purchase a home valued as high as $400,000 without having to pay a Toronto land transfer tax!
Although the good ol’ days of a no-money down mortgage (0% down payment) are no longer directly available through CMHC, 5% down payment mortgages with a 5% cash back component are. CMHC also permits down payments to come from borrowed sources such as Visa, Line of Credit or family. Used in conjunction, a homebuyer can borrow their down payment and obtain a 5% cash back mortgage allowing them to pay off the borrowed money once the home closes.
Buying one’s first home is, after all, completely overwhelming and likely the largest purchase a person will ever make. There are countless websites to help buyers do their initial homework and understand these incentives. Then there are the experts. Remember Canada wants you to own a home and has created these measures to support you in your first go-around!