The time has never been better to be a first time home buyer in Ontario. With evidence lesser interest rates, constant home prices and a range of great plans created specially for first time home buyers.
The First Time Home Buyer RRSP Plan, the Ontario Land Transfer Tax Credit as well as the Toronto Land Transfer Tax Credit are the three major plans that the government has presented for the people who want to buy home for the first time in Ontario. Both the RRSP home buyers plan and the Ontario land transfer tax credit are presented province wide. The Toronto land transfer tax credit is only available to first time home buyers purchasing in Toronto. No other places in Ontario at this time have their private municipal land transfer tax.
Here is a summary of the programs:
First Time Home Buyer RRSP Plan (HBP) - This program allows a first time home buyer to remove up to $25,000 from their RRSPs to buy or make a home. You need to repay the amount you withdrew within 15 years which should be repaid annually at the minimum amount of 1/15 of the withdrawn sum. If the entire $25,000 is removes, the lowest yearly refund will be $1,667. However, if someone is unable to repay the minimum amount in any year, then the remaining balance amount is deposited in the tax payer's income. This is an excellent program for people who have RRSP's in place but do not possess enough funds for a down payment.
The Ontario Land Transfer Tax Credit - This loan helps to repay the expenses of the regions land transfer tax to highest of $2000. The first time home buyer may claim the whole maximum amount or a portion of the maximum reimburse amount. Thus, the first time home buyer is able to purchase a home of worth $227,500 where he is exempted from paying any land transfer fees. Any amount greater than $227,500 is taxed a rate of around 1.5%. To be eligible the property must be owner occupied.
The Toronto Land Transfer Tax Credit - Very similar to the Ontario Land Transfer Tax Credit however it only applies to homes purchased in the city of Toronto. The refund money is even greater at $3725. 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 money higher than $400,000 will be taxed at a rate of 2%. To be eligible for this program, you need to check the property has to be occupied by the owner of the home.
To see how much you can qualify for or how much your mortgage payments would be, use our Ontario mortgage calculator. Programs also exist for home buyers who have good credit (a beacon score of 650 or higher) but do not have an RRSP or a sufficient down payment. This program is not exclusive to first time home buyers. For more information, see 'No money down mortgage' on our Ontario first time home buyer page. If you would like more information on any of these programs, please contact me at www.ontariomortgagesuperstore.com.
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