The government has provided a number of incentives for first-time home buyers. These measures will help offset some of the costs of purchasing your first home and provide you with some of the cash to make a down-payment.
The Home Buyers Plan is a federal government program that allows for you to withdraw penalty-free from your RRSP account. This will give you access to some of your savings without having to pay tax on the withdraw as would normally occur if you pre-maturely withdrew from your RRSP account. Regularly payments are made to repay the amount to your RRSP, but it does allow for you to access additional cash to make your purchase.
There is a First-Time Home Buyers’ Tax Credit available since January 27, 2009 that is a non-refundable credit of $5,000 for home buyers who have acquired their first home. The credit is determined by multiplying the lowest personal income tax rate by $5,000. This credit is non-refundable so the government will not pay you the money if you are already in a refund position, but if you currently owe taxes it will reduce your taxes owing.
If you are purchasing your first home in Ontario, you may also be eligible to receive a refund of part of your Land Transfer Tax. If you have entered into an agreement to purchase a home after December 13, 2007, then the refund is applied for all newly constructed or resale homes. Homes acquired before 2007 are only eligible for the refund on newly constructed homes. However, a condition of this refund is that you have not previously owned a home ANYWHERE in the world, not only Canada.
As well, the home must be used as a primary residence and not as a rental property. The maximum refund is $2,000. The time frame is eighteen months to apply for this refund after the transfer date.
No comments:
Post a Comment