By Condo Culture
Buying a home is quite possibly the largest investment you will make in your lifetime. If you're like most first time home buyers you may find the process extremely challenging and honestly at times a bit intimidating.
That is why at Condo Culture, we are committed to helping you navigate the process and provide sound advice to make buying your first home as smooth as possible. In this week's blog we hope to save your two most precious resources, time and money, by taking a look at some of the incentives available to first time home buyers in Ontario. Of course, we remain available to sit down to answer all your specific questions and discuss how Condo Culture's tailored approach can help you easily purchase your first condo.
1. First Time Home Buyer Incentive Shared-Equity Mortgage
The government will contribute 5% or 10% of the purchase price towards your down payment in exchange for the same amount of equity in your home. Key highlights: Annual household income cannot exceed $120,000. Only available for Canada Mortgage and Housing Corp (CMHC) insured mortgages. The Government's share has to be repaid within 25 years or when you sell your home (whichever happens first). Any gains and losses in the market value will be shared with the government. No interest will be charged. For more information: https://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive
2. Land Transfer Tax Rebate
First time home buyers in Ontario may qualify to receive a refund of all or part of the land transfer tax on an eligible home. Key highlights: Must be 18 or older. You or your spouse cannot have previously owned or have an interest in a home anywhere in the world. The refund can be claimed at the time of registration and will offset the land transfer tax payable. The maximum amount of the refund is $4,000. For more information: https://www.fin.gov.on.ca/en/bulletins/ltt/1_2008.html
3. Registered Retirement Savings Plan (RRSP) Home Buyers Plan (HBP)
Allows first time home buyers to withdraw from your RRSP without any penalties or taxes to buy an eligible home. Key highlights: Withdrawal limit is $35,000. You can withdraw funds from one or more RRSP as long as you are the owner of each account. You have 15 years to repay the borrowed funds to your RRSP. For more information: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html
4. First Time Home Buyers Tax Credit
First time home buyers can claim up to a $5,000 non refundable income tax credit for the purchase of a qualifying home.
Key highlights: To claim, enter $5,000 on line 31270 of your tax return. The actual reduction of your taxes is calculated by multiplying $5,000 by the lowest possible tax rate for the year (15%) which would be $750. The tax credit must be claimed within the year of purchase. For more information: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31270-home-buyers-amount.html