Incentives for First Time Home Buyers in Canada
Register Now03.02.23
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Buying
Incentives for First Time Home Buyers in Canada
Buying a home is an exciting first step on the road to financial independence. In Canada, there are many incentives available to first time home buyers. These incentives come in the form of grants and rebates that can help reduce the cost of purchasing a home or make it easier to qualify for a loan. Let’s take a look at four of these programs that are available right now.
The Home Buyer’s Plan (HBP)
The HBP is a federal program that allows qualifying first time home buyers to withdraw up to $35,000 from their registered retirement savings plan (RRSP) without being subject to taxation. This money can be used for closing costs, down payment, or other expenses associated with purchasing a home. To be eligible for this program, you must have lived in your home as your primary residence for at least five out of the past eight years. Additionally, you must also have maintained your RRSP account for at least 90 days prior to withdrawing funds from it.
Land Transfer Tax Refunds
Most provinces offer some sort of land transfer tax refund program which can provide relief on taxes paid upon purchase of a property. In Ontario, first time buyers are eligible for up to $4,000 in tax refunds if they buy an eligible property before Dec 31, 2021. Other provinces may have different requirements and amounts so it is important to research what is available where you plan on making your purchase.
Home Buyer’s Tax Credit (HBTC)
The HBTC is another federal program which provides first time buyers with up to $750 in tax credits when they file their yearly income tax return after purchasing their new property. The credit covers closing costs such as legal fees or disbursements related to the purchase of the property such as title registration fees or appraisal fees required by lenders/banks when obtaining financing. To qualify for this credit, you must be considered a “first-time buyer” and live in the purchased house as your primary residence within one year after purchase date. You will also need an official copy of your closing statement (closing statement summary) showing the amount paid towards closing costs when filing your income taxes next year in order to receive this credit amounting up to $750 total per person ($500 + $250).
CMHC Mortgage Loan Insurance Premium Refunds
The Canadian Mortgage and Housing Corporation (CMHC) offers mortgage loan insurance premiums refunded back on new purchases if certain criteria are met including but not limited to having 5% down payment saved up and meeting standard mortgage lending requirements from lenders/banks including providing proof of sufficient income levels etc.. Depending on how much was borrowed and what type of mortgage was taken out there could be up to 15% refunded back! This incentive applies both for First Time Home Buyers as well as repeat buyers who meet all eligibility criteria set out by CMHC guidelines!
Purchasing a house can seem like an intimidating process but it doesn’t have to be! With these four incentives available now, first time home buyers can take advantage of them while they last and get closer than ever before towards owning their own piece of real estate! Do your research and know what programs are applicable where you plan on making your purchase so that you don’t miss out on any potential savings opportunities! With just a bit of effort upfront doing due diligence and understanding all applicable regulations & requirements there could be great financial benefits waiting around every corner! Good luck & happy house hunting everyone!
