If you’re thinking of buying your first home or condo, congratulations! There are so many great reasons to dive into the world of home-ownership and say ‘so long’ to renting. Beyond the low interest rates we’ve been experiencing here in Canada, there are also some government incentives that may help you finally break into the real estate market.
Let’s review some of the programs available that just might take you from sitting on the fence…to sitting on your new front porch!
This incentive (set to start in September 2019) is offered by the Canadian National Housing Strategy and it’s specifically designed to address the challenge of buying affordable housing. If you’re looking for a home that costs less than $480,000 and you have a household income of $120,000 or less, you may qualify for a ‘shared equity mortgage loan’. This loan of either 5% or 10% of the home’s purchase price (based on if you buy a new or resale home) is interest free, and you pay it back within 25 years or when your house sells. What’s the catch, you ask? When you pay the loan back, you don’t pay the same amount of money you received when you bought the home, you pay back the 5% or 10% of the sale price, which will likely be more than your original purchase price.
- The RRSP Home-Buyers Plan
Another federal government program, the Home Buyer’s Plan (HBP) also helps buying your first home. How it works is that you can withdraw up to $35,000 of your RRSP savings ($70,000 for a couple) to help with your home purchase or build. You don’t pay tax or fees when you withdraw this money, as long as you pay it back within 15 years.
- Land Transfer Tax Refund
You may also be eligible to get a refund for up to $4,000 (depending on the cost of your first home purchase) to offset the cost of land transfer taxes. To learn more about this Ontario Government program, click here.
- The First Time Home Buyer Tax Credit
This home buyer’s tax credit helps with the various costs involved when buying a home, such as appraisals, inspections, legal fees and so on. If you’re a first-time buyer, you can claim up to $5,000 on your tax return for the purchase of your home purchase, as long as you meet the criteria.
- GST/HST New Housing Rebate
This GST/HST New Housing Rebate is strictly for new home builds and first-time home buyers. You can save some of the tax on new construction, or homes with ‘substantial’ renovations. There are sometimes other financial incentives such as those related to buying or renovating ‘green’ or eco-friendly housing; be sure to do your research to find out if and when they are effect as funding comes and goes for many such programs. As with all rebate or financial incentive programs, there are clear eligibility guidelines and it’s essential to learn if you qualify before banking on any of that money. Be sure to talk to the professionals you are working with when buying your home, such as your lender, real estate sales representative, and of course, your real estate legal team; they can help you along the way. These incentive programs don’t last forever and qualifying rules can change, so if you’ve been putting off buying that home, you may want to act sooner than later. At Ares Law, we specialize in real estate law in Bracebridge and the larger Muskoka region. It’s our job to ensure that your first time – and every time – you purchase property that the process runs smoothly and that you have all the facts each step of the way. If you’re looking to purchase in this area, call us today at (705) 645-8743 and let’s get started.
