If you are a first time home buyer then you should make it your business to know all about the wide array of benefits you are eligible for in Canada. You will be thrilled to know that there are multiple government programs designed to make the purchase of your first home much easier as you take this momentous first step.
There are 5 in total and we will walk you through all of them. Not all of them may suit your current situation, but read on and learn all about how you can save money and time during the purchase of your very first home!
The First-Time Home Buyers’ Credit
This is probably the one you are most familiar with. The Canadian government income tax credit towards the closing for eligible applicants. The credit applies to a max of $5,000 of closing costs resulting in a credit of $750. You will only be eligible for this if this is your first home, if your partner is also on the mortgage then they too will need to be a first time buyer in order for you to be eligible.
Home Buyers’ Plan – RRSP
With this benefit, you are able to take out a maximum of $25,000 from your RRSP to use specifically to purchase or build a home. If you are applying as a couple, then you are able to take out a total of $50,000. Even better news here is that you will not be taxed on this amount provided you pay this back within 15 years. to buy or build a home. In order to qualify for this initiative, both yourself and any other home buyers must not have occupied a home as the principal residents within the past 5 years.
Down Payment Program – Five Percent Down
This is another great program for those looking to get into the market. It allows first time buyers like yourself to only pay 5 percent. Homebuyers will still need to qualify for the mortgage with a lender along with being able to provide the closing costs of the property.
The home purchase cost cannot be in excess of $1 million and a 25 year long amortization to satisfy the eligibility requirements of this program. There are a number of other stipulations dependent on each homebuyers unique circumstances, so talking to a mortgage broker is advised.
Rebates for Land Transfer Tax
Land transfer tax is needed for every purchase of a home. You may have to pay this both provincially and to the municipality to which you reside. Contacting your mortgage broker and lawyer and asking them about the details of how this rebate will apply to your purchase is advised as there will be a number of factors that are unique to your home based on cost and location that need to be considered.
New Housing Rebate
You may also be eligible for a rebate on the HST that you will pay when you buy your home. This can extend outside of the realm of new homes to renovated homes, repairs following a fire to a whole host of circumstances. Those who are buying a new home are eligible for a rebate of 36 percent.
These are all great programs that can make a huge difference to those who are looking to buy their first home in Canada. Contacting your mortgage broker to discuss the details all five of the Canadian government programs discussed here can make a huge difference to your home buying experience. Not only will it save you time and money, but it can free up money that you can then spend on moving and other costs associated with moving.