First time Home Buyer Programs

First time Home Buyer Programs

There was an interesting article I found in the Globe & Mail Investor that was provided in partnership with the Investor Education Fund. The Investor Education fund is a non-profit organization promoting financial literacy to Canadians. The information here should help inform new home buyers about several government programs that would assist them in achieving their dream of home ownership. Beyond government programs, Homes By DeSantis offers additional benefits such as flexible deposit structure and 5% minimum down payments.

Both the government of Canada and Ontario have set up programs to help first-time home buyers. These include:

-RRSP Home Buyer’s Plan

 -Land Transfer Tax Rebate

 -First-time Homebuyers’ Tax Credit.


The RRSP Home Buyer’s Plan

Under this plan, first-time home buyers can withdraw up to $25,000 from their RRSPs tax-free to fund their purchase. If both you and your spouse qualify, you can each withdraw up to $25,000 from your RRSPs, for a total of $50,000.

How do I qualify?

-You must not have lived in a home owned by you or your spouse in the last five years.

 -You must have entered into a written agreement to buy or build a home that you intend to occupy as your principal residence. The purchase of a cottage, for example, would not qualify for this program.

What other rules apply?

-You can only withdraw money that has been in your RRSP for at least 90 days. Tip: If you have signed an Agreement of Purchase and Sale and you have at least 90 days until your closing date, you can open an RRSP and make a contribution. You will be able to withdraw the same money and put it towards the purchase of your home. You will also be able to deduct this amount from your income at tax time.

 -You have up to 15 years to repay the amount you withdrew from your RRSP under the Plan.

 -You must start to make repayments in the second year after the year in which you made your withdrawal(s).

 -You have up to 15 years to repay the full amount that you withdrew under the Plan. In general, you have to repay 1/15 of the total amount you withdrew each year.

 -After 15 years, any amount you have not paid back to your RRSP will be taxed. You will owe this tax when you file your income tax return in the following year.


Land Transfer Tax Rebate

You may receive a refund from the Ontario government of up to $2,000 of the land transfer tax you paid on your first home. Other provinces may have similar programs.

How do I qualify?

-You must be at least 18 years old.

 -You cannot have previously owned a home, or an interest in a home, anywhere in the world.

 -Your spouse cannot have owned a home, or an interest in a home anywhere while he or she was your spouse.

What other rules apply?

-The maximum refund is $2,000.

 -If you qualify, you may receive the refund at the time you register your home purchase. If not, you must apply for the refund no later than 18 months after the registration date.


First-time Home Buyers Tax Credit

This tax credit is based on an amount of $5,000. To calculate, you must multiply the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.

How do I qualify?

-You or your spouse or common-law partner must acquire a qualifying home.

 -You cannot have lived in another home owned by you or your spouse or common-law partner in the year you buy your first home —or in any of the four preceding years.

Republished from
Globe & Mail Investor  
Source: Online

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