First-Time Home Buyers
Congratulations on the decision to be a first time home buyer. Buying a home is often the single largest purchase that one will make. To help young families and others looking to buy a home for the first time the following programs and tax credits are available:
Government Mortgage Programs
Home Buyers' Plan Withdrawal Limit
To provide first-time home buyers with additional access to their RRSP savings to purchase or build a home, the Home Buyers' Plan (HBP) increases the withdrawal limit to $25,000 from $20,000.
First-Time Home Buyer Tax Credit (HBTC)
The HBTC will assist first-time home buyers with the costs associated with the purchase of a home, such as legal fees, disbursements and land transfer taxes, which are a particular burden for first-time home buyers, who must also save for a down payment. A 15 % credit will be applied to a $5,000 amount, and will provide up to $750 in tax relief to reduce the costs associated with first home purchases completed after January 27, 2009.
Land Transfer Tax Refunds
First-Time home buyers may be eligible for a refund of all or part of the tax payable up to a maximum of $2000. Refunds may be claimed at time of registration or claimed directly from the Ministry of Revenue. Applications for a refund must be made within 18 months after the date of the transfer. For more information visit http://www.rev.gov.on.ca/en/refund/newhome/
Lender Mortgage Programs
5% Lender Cash Back
If you qualify for this program the lender will provide the funds that can be used for the 5% down payment. Interest rates are higher for this program and if you discharge your mortgage before the end of your term, you will be required to pay back a pro-rated portion of the cash back.
2% – 5% Lender Cash Back
If you qualify for this program the money is advanced to your lawyer at the time of closing and may be used for new home furnishings, appliances, or whatever you wish. Interest rates are higher for this program and if you discharge your mortgage before the end of your term, you will be required to pay back a pro-rated portion of the cash back.
For more information on home financing go to our “mortgages that work” web site and contact Dale or CaroleAnn Bryant – we always enjoy working with first-time home buyers.