first time buyers
There are a few programs that are specifically designed to help out new home buyers in Ontario.
It is a good idea to discuss your purchasing options with Martin prior to actually putting an offer on a home to make sure you know how much of a mortgage you are going to qualify for as well as which new home buyers programs you will be eligible for.
Home Buyers' Plan (HBP) This is a federal government program that allows you to borrow up to $25,000 from your RRSP tax free to fund your purchase. If both you and your spouse qualify, you can each borrow up to $25,000 from your RRSPs, for a total of $50,000. The money must have been in your RRSP for at least 90 days.
To Qualify for the HBP you must not have lived in a home owned by you or your spouse in the last 5 years. You must have entered into a written agreement to buy or build a home that you intend to occupy as your principal residence. You have up to 15 years to repay the amount you borrowed from your RRSP. You must start to make repayments in the second year after the year in which you made your withdrawal(s). In general, you have to repay 1/15 of the total amount you withdrew each year. After 15 years, any amount you have not paid back to your RRSP will be taxed. You will owe this tax when you file your income tax return in the following year.
Land Transfer Tax (LTT) Refund You may receive a refund from the Ontario government of up to $2,000 of the land transfer tax you paid on your first home. You must be at least 18 years old and you cannot have previously owned a home, or an interest in a home, anywhere in the world. The same applies to your spouse. You may receive the refund at the time you register your home purchase. If not, you must apply for it no later than 18 months after the registration date.
First-time Home Buyers' Tax Credit (HBTC) You or your spouse can claim this tax credit on your annual income tax return and you or your spouse must have acquired a qualifying home after January 27, 2009. And, you cannot have lived in another home owned by you or your spouse in the year you buy your first home or in any of the 4 preceding years.