If you’re buying a home for the first time, you will need all the help you can get. Make the most of guidance from parents and experienced friends, advice from your realtor and assistance from your mortgage broker! These are individuals who have been in your shoes and have your best interests in mind. The provincial government also lends a helping hand to first-time buyers, offering a number of programs designed to alleviate the financial strain that buying a home can put on young people.
First-Time Home Buyers’ Tax Credit – This program provides a 15 percent credit on closing fees, up to a maximum of $5,000. This provides a maximum credit of $750 come tax time.
Land Transfer Tax Rebate – When you purchase a property in Ontario, you pay the province’s land transfer tax. A rebate is offered to first-time buyers only, providing a rebate of up to $2,000. The eligible rebate amount is higher in the City of Toronto, capped at $3,725.
RRSP Home Buyers’ Plan – This program allows first-time homebuyers to withdraw up to $25,000, tax-free, from RRSPs in order to purchase a principle residence. This means that you cannot take advantage of this program if you are purchasing an ‘income property’ that you don’t plan on living in.
The government also offers another program for homeowners who wish to make their homes safer and/or more accessible:
Ontario Healthy Homes Renovation Tax Credit – This personal income tax refund is offered to seniors and the family members who they live with. Qualifying homeowners are eligible to claim up to $10,000 in home renovation expenses and will receive 15 percent back, meaning a credit of $1,500. There are a few eligibility requirements: applicants must be 65 or older (family members may apply if they are making home modifications to accommodate a live-in relative who is 65 or older) and the home renovations must be an improvement that will make the home safer and/or more accessible. Examples include walk-in showers; grab bars in bathrooms; handrails in hallways; wheelchair ramps; non-stick flooring and others. Visit www.ontario.ca/healthyhome for a complete list of eligible expenses.