Buying a house is likely to be one of the biggest – if not the biggest – investments that you’re going to make in your life. Fortunately, there are a number of first-time home buyer programs that you can take advantage of that can help to soften the financial blow. These programs are especially helpful to first-time home buyers that are still working to establish themselves financially. The following are a few of the first-time home buyer programs that you should look into:
- The First-Time Home Buyer’s Tax Credit – The federal government established the First-Time Home Buyer’s Tax Credit as part of its federal budget back in 2009. This tax credit allows first-time home buyers to get back as much as $750 of the money that they spent on closing costs. These closing costs can include the money that they spent on land transfer taxes, legal fees and home inspections. Almost all types of homes qualify as long as they are in Canada and as long as you plan on residing in the home within one year of buying it. If you owned a home or lived in your spouse’s home within the prior four years, you will not qualify.
- The RRSP Home Buyer’s Plan – The RRSP (Registered Retirement Savings Plan) Home Buyer’s Plan lets you withdraw upwards of $25,000, or $50,000 as a couple, from your RRSP in order to build or purchase a new house. What’s particularly helpful about this plan is that the money you withdraw will not be taxed as long as you eventually repay this money back into your RRSP. If you or your spouse occupied a house as your main residence within the past five years, you won’t qualify.
- The GST/HST New Housing Rebate – Every Canadian that is buying a new home, renovating their old home or rebuilding a house that was destroyed in a fire can qualify to receive the GST portion of the New Housing Rebate as long as they paid their GST taxes. Ontario also offers rebates on the provincial part of the HST taxes that you paid if you’ve purchased a new home or renovated an old home.
- The Land Transfer Tax Rebate – When you buy a house, you’ll have to pay a provincial Land Transfer Tax. Municipalities like Toronto also charge their own Land Transfer Tax. As a first-time home buyer, you could qualify for a Land Transfer Tax Rebate, which is upwards of $2,000 for provincial fees. In Toronto, the maximum rebate you can qualify for the Land Transfer Tax is $3,725.
These first-time homebuyer programs can be extremely beneficial in helping to offset some of the costs of buying a new house. If you’re planning to buy your first home, be sure to look into them.
