Home buying can be a daunting and complex process, especially if it is your first time. Before taking the leap into this major financial commitment, be sure to learn about some of the benefits that exist.
“As a first-time home buyer in Ontario, you are eligible for certain tax-refunds,” says Ray Ferris, president of the Ontario Real Estate Association. “Federal and provincial programs exist exclusively for first-time home buyers, and they are a great way to save money on a purchase or to put more towards a down payment. Talk to your Realtor about the programs available to you and how best to take advantage of them.”
Here are some of the options:
RRSP plan: If you are a first-time home buyer with money in an RRSP, you can withdraw up to $25,000 without paying any income tax. If your spouse is also eligible, that’s $50,000. The withdrawn amount must be repaid within 15 years.
Tax credit: The Government of Canada introduced a First Time Home Buyers Tax Credit in 2009. The $5,000 non-refundable income tax credit amount applies to qualifying homes acquired after January 27, 2009, and provides up to $750 in federal tax relief.
Ontario land transfer tax credit: First-time home buyers may be eligible for a refund of all or part of the provincial land transfer tax which is applied to all home purchases in Ontario. Eligible buyers will not have to pay a land transfer tax on homes up to $227,000; homes purchased for more than $227,000 may receive a refund of up to $2,000. The maximum amount of the refund is $2,000.
~article courtesy of NewsCanada