First aid for first time buyers
Buying your first home is a thrilling and slightly terrifying experience. It’s also one of the best investments you’ll ever make – so worth the effort. To help you, there are special government incentives that give you the leg up you need. Here’s a quick overview, but for all the details give us a call.
The Home Buyer’s Plan for First Time Buyers (HBP)
If you haven’t owned a home that you occupied as your principal residence during a 4-year period prior to purchase, this federal government plan is for you. A maximum of $60,000 can be withdrawn from your Registered Retirement Savings Plan to buy or build a qualifying home. You can take out the money tax-free but you do have to pay it back within 15 years.
Land Transfer Tax Refunds
This from the Ontario government, with stricter qualifications than the HBP: you must never have owned any home anywhere. The maximum refund is $4,000 – equivalent to the LTT on a $368,000 home. In addition, the City of Toronto also has its own Municipal Land Transfer Tax. They’ll refund first timers a maximum of $4,475 for a total potential savings of $8,475.
First Time Buyer Tax Credit
On top of your purchase price, there will be additional costs – legal fees, HST (on newly constructed homes) and adjustments like taxes and utilities prepaid by the seller. You can claim up to $10,000 on your tax return for the purchase of a qualifying home if you meet the criteria set out by the CRA.