First time home buyers

If you decided to buy or thinking of buying a home for the first time you are lucky! Both the government of Canada and the Ontario government have programs to assist first time home buyers. I’ve gathered some general information about two most famous programs along with some tips. The information is general so please don’t hesitate to call me to clarify specifics.

RRSP Home Buyer’s Plan (HBP)

This program was initiated by the federal government and allows first time home buyers to withdraw up to $20,000 from their RRSPs tax free to use towards a new home purchase. If you and your spouse both qualify for that plan both can withdraw up to $20,000 which makes a total of $40,000. To qualify as a first time home buyer, purchaser must not have lived in a home owned by him or herself, or by his or her spouse.

You will have to enter into written agreement to purchase or build a home that will be your primary residence in order to be able to withdraw money from your RRSP. Furthermore, money can be withdrawn only after they’ve been on your account for at least 90 days. Money withdrawn from RRSP must be paid back in 15 years. Even if you don’t have money on your RRSP account you can still benefit from this HBP, since contributions to RRSP can be retroactive. Please contact me for more details

Land Transfer Tax Rebate

This program is rewarding first time buyers of newly built homes by Land Transfer Tax refund for up to $2000. To qualify for a program:

• The purchaser must be at least 18 years old

• Application for refund must be made within 18 months after the date of conveyance or disposition

• The purchaser must occupy the home as his or her principle residence within 9 months of the date of conveyance or disposition
• The purchaser cannot have previously owned a home, or an interest in a home anywhere in the world

• A spouse or same-sex partner of the purchaser cannot have owned a home, or an interest in a home, anywhere while the spouse or same-sex partner of the first time purchaser

• The purchaser cannot have received an Ontario Home Ownership Savings Plan (OHOSP) based refund of land transfer tax.

This information is taken from Ontario Ministry of Finance, please visit their website to learn more or contact me for details.

Additional Information

• You need to know that with mortgage insurance you can obtain up to 100% of the value of your home with as little as 0% down payment, for a home worth up to $300,000. Furthermore, the Tax Refund and money from the RRSP can be applied towards the down payment if there are at hands at the time of closing.

• Start researching for a new home and familiarizing yourself with the industry as early as possible.

• Get your credit report and get pre-approved. This will enable you to understand whether you can afford a new home or not.

• Consider using a help of a competent Realtor®. It is absolutely free and will help you to avoid the pitfalls. Please check the page How Realtor® like me can help you or contact me for more details.