First-Time Home Buyer Plans in Ontario
If you are a first time home buyer there are a couple of rebates/tax credits available to you which are important for you to know about, this way you can plan accordingly.
- First-Time Home Buyer Tax Credit
- This tax credit is designed to help with your closing costs
- Currently the rebate usually comes up to $750.00 and must be claimed within a year of purchasing the property.
- In order to receive this tax credit you must file it with your personal tax return.
- You must meet certain criteria in order to be eligible.
2. The Home Buyers Plan
- This plan allows for first-time home buyers to borrow up to $25,000.00 from their RRSP(Registered Retirement Savings Plan) to use as a down payment tax free.
- If you are buying a home with your spouse who is also a first-time home buyer you both can access $25,000.00 each being a total of $50,000.00.
- You must pay back this loan within 15 years with your first payment made in year two. The minimum payment must be made every year after that.
- There are certain requirements that must be met in order to qualify.
3. Land Transfer Tax Rebate
- In Ontario, first-time home buyers can qualify for a rebate of up to a maximum of $4,000.00.
- If you live in Toronto you can qualify for both the provincial land transfer tax rebate of $4,000.00 as well as the municipal land transfer tax rebate of up to a maximum of $4,475.00.
- You must apply within 18 months from the time the property is transferred to you.
There are certain criteria you must meet in order to be eligible for either provincial or municipal LTT rebate:
- You must be 18 year of age.
- You must be a Canadian citizen or permanent resident of Canada
- You must live in the home within 9 months of purchasing it.
- You must be a first-time home buyer – cannot have owned a home or an interest in a home anywhere in the world.
- Your spouse cannot have owned a home during the time they have been your spouse.
If you qualify your lawyer will help you file the necessary paperwork.
