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First Time Home Buyer

There has been a few changes to the mortgage lending guidelines in the last few years as well as implementing the HST on services. The Harmonized Sales Tax will not be a major factor in the real estate market as it doesn’t apply to most resale properties. It will however affect the taxes on the cost of services related to the real property transaction (Closing costs; Legal Fees, Real Estate Services, etc.).

For first time home buyers, this process may seem intimidating and even stressful. Having said that, the government is trying to encourage those who haven’t owned an interest in property at all, anywhere in the world, to start owning!

There are 3 main benefits as a First Time Home Buyer:

1. The Ontario government is giving a rebate on the land transfer tax for houses priced under $400,000 outside of the 416. Toronto has a municipal Land Transfer Tax as well, which would double the cost for buyers who want to live in City.

Buyers of NEW homes can get a rebate of up to $24,000 regardless of the price of home as HST applies to new construction homes (builders usually include that in their pricing).

2. Another benefit for first time home buyers is that the government has allowed buyers to use your RRSPs towards your down-payment of your house. Up to $25,000 in your RRSP reserves, you get 15 years to put it back into your RRSP with no penalty (tax free).

3. The Federal government has introduced a Home Buyers Tax Credit to help ease the burden of first time buyers with their closing costs. The $5,000 non-refundable HBTC amount applies to homes purchased after January 27, 2009, and provides up to $750 in federal tax relief on your income tax.

9 Steps to Ownership