Are you a first time home buyer? It’s important that you review the real estate market carefully and consider all available benefits you can receive by becoming a homeowner for the first time.
Through close analysis of the full range of government programs, you can make significant savings on your total home purchase costs. In this post, we’ll take a look at several first-time buyer benefits you can’t ignore.
The Ontario Home Ownership Savings Plan
For those just considering the idea of purchasing their first home. The Ontario Home Ownership Savings Plan could offer a significant financial boost. The plan allows first-time buyers to open a savings account at their institution. Thus, they can contribute a set amount of their income for a $500 rebate through their tax refund. For a couple saving for their first home, the amount doubles to $1000 per year. This can then be used to boost housing purchase resources.
The Home Buyer’s Plan
The Home Buyer’s Plan or HBP allows a person to take money from their RRSP and use it to fund their home purchase. Borrows are allowed to take up to $25,000 from their RRSP. For couples who both qualify for the Home Buyer’s Plan, a maximum $50,000 RRSP withdrawal amount is allowed.
To qualify for the Home Buyer’s Plan, you must have lived in a home that is not owned by you or your spouse for the past five years. You must also intend to use the home you’re buying as your principal residence. It’s a program that can help buyers significantly reduce their monthly mortgage costs by placing a larger down payment on properties.
First-Time Home Buyers’ Tax Credit
The First Time Home Buyers’ Tax Credit can either be claimed by the person buying the home or their spouse. When they file their taxes the year after completing the purchase. The tax credit is $5000 on a qualifying property and is applied if you did not live in a home owned by you in the preceding four years.
Land Transfer Tax Refund
Under the Land Transfer Tax Refund program, the Ontario government refunds buyers up to $2000. The refund is on the land transfer tax they pay for their first home. This can help minimize a buyer’s tax burden for their first year of ownership. Also, it helps them stabilize their finances to ensure a strong foundation moving forward.
There are, however, several important stipulations to consider when applying for the Land Tax Transfer Refund. Firstly, the application must be made no later than 18 months after registering the home purchase. In addition, you cannot have owned a home anywhere else in the world when you apply for the refund.
The Canadian government is now encouraging buyers to enter the housing marketplace and reap the rewards of home ownership. Lastly, to discuss the many first-time buyer benefits available within the marketplace, speak with one of our specialists directly today at Mortgages.ca.