Hi there! 

Our previous post ‘Spring has Sprung, for some of us!‘ highlighted pride of ownership and the benefits of mortgage refinancing for those that already own their home and wish to tap into equity to complete a renovation project, pay off credit card debt, lower monthly mortgage payments and/or adjust the length of their mortgage.  But, what if you are a first time home buyer?  Where does one begin?  There are many steps, documents, decisions to be made and parties involved when purchasing a property; and as mortgage brokers and home owners we fully understand the complexity … especially when making a purchase for the first time. 

Perhaps you’ve already started home-shopping.  Maybe you’ve got your eye on the perfect property, or it could be that you haven’t found THE ONE yet … but you can picture it, right?!  🙂  The large kitchen, where the smell of familiar homemade recipes wafts through the air and a fine bottle of red sits just waiting to be poured into those vintage crystal long stems; the living room with the new flat screen and comfy sofa where you can chill out with your significant other and watch a romantic (hubby, if you’re ready this … I meant HOCKEY game), movie!  The master bedroom with ensuite (RnR!), the big backyard (BBQ’s!).  We get it!  🙂  Purchasing, building, designing, or renovating a home is an amazing experience; yet it is one that requires planning (financial and otherwise) and professional leadership and representation so that the process goes smoothly, according to your timelines, and within your budget. 

In order to move ahead with your plan to purchase a home for the first time, you must first  determine how much you can afford.  We have mortgage calculators that can help with this.  Be sure to get a preapproval before your home-shopping begins as well as this will secure the lowest rate and you will know how much you can spend on your new home.  Please call or email if you have any questions about obtaining a preapproval.  If you would like to securely apply right now, please click here (or on the image below) and you will be directed to our online preapproval application form.

Did you know that there are great First Time Buyer programs, rebates and tax credits that are available to help reduce some of the costs of purchasing your first home as well?  The list below will point you in the right direction.

• Home Buyer Tax Credit (HBTC)

• RRSP Home Buyers Plan

• Land Transfer Tax Refund

• Toronto Municipal Land Transfer Tax Credit

I’m providing an overview of each program, rebate and tax credit along with links to each for more information.  Be sure to contact me if you have any questions about any of these!

 

What is the Home Buyer Tax Credit (HBTC)?

You will qualify for the HBTC if:

• You, your spouse or common-law partner acquired a qualifying home; and
• You did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.

Please Click here for additional HBTC details

 

What is the RRSP Home Buyers Plan (HBP)?

The Home Buyers’ Plan (HBP) is a program that allows you to withdraw funds from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. You can withdraw up to $25,000 in a calendar year.

Click here for additional RRSP Home Buyers Plan information.

 

What is the Land Transfer Tax Refund for First Time Home Buyers?

First-time homebuyers may be eligible for a refund of all or part of the tax. For transfers where:

  • the agreement of purchase and sale was entered into after December 13, 2007, the refund applies to all homes, whether newly constructed or resale.
  • the agreement of purchase and sale was entered into before December 14, 2007, the refund only applies on the purchase of a newly constructed home.

The maximum amount of the refund is $2,000. If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Finance. No interest is paid on this refund.

Please click here for additional Land Transfer Tax Refund details.

 

What is the Toronto Municipal Land Transfer Tax Credit?

First time home buyers of a newly constructed or re-sale residential property qualify for the Toronto Land Transfer Tax Rebate. The maximum allowable rebate is $3,725.00. This allows first time home buyers in Toronto to purchase a home valued as high at $400,000 without having to pay a Toronto land transfer tax. Any additional amount above $400,000 will be taxed at a rate of 2%. The property must be owner occupied.

If you are eligible for a rebate of all or a portion of the MLTT you owe, your lawyer will be able to claim the rebate electronically through Teraview version 6.0 software when he/she registers your transfer/deed.

More information on the Toronto Land Transfer Tax Rebate and the Toronto land transfer tax rate can be found here (City of Toronto website).

I hope this helps; and I hope that I hear from you soon!

If you have a fun home-buying experience or advice/tips that you would like to share, or if you would like to guest-blog, please contact us at info@yourmoneymattersinc.ca

 

Have a great weekend!

Mena Fiore 

Mortgage Broker / President