Buying a new home is by no means cheap, and moving into a location like the GTA makes that statement all the more true.
But the Ontario government wants people to move here, invest in real estate, and contribute to the economy. To accomplish this, the government has provided many government programs to help first-time home buyers.
These include:
- 1. HST New Housing Rebate
The federal government provides an HST rebate of up to 36% to buyers who purchase either a newly built, or greatly renovated, home. The rebate is intended to encourage people to build upon and improve their properties. The provincial government provides an even more generous rebate, of up to 75% off the provincial part of the HST.
- 2. Mortgage Loan Insurance Rebate for Energy-Efficient Homes
To keep demands on the power grid to a minimum, the CMHC provides a rebate of up to 10% of mortgage insurance costs if a home meets certain standards for energy efficiency. You will need to provide an EnerGuide assessment showing a score of 82 or higher. This tax credit applies to both previously- and newly-built homes.
- 3. First-Time Home Buyer’s Credit
This tax credit offsets closing costs. If you are buying your first house, you are eligible for a 15% credit on your closing costs. The maximum amount for the credit is $750.
- 4. CMHC 5% Down Payments
The CMHC makes mortgage insurance available to first-time homeowners even if they can only afford a 5% down payment. The property must be owner-occupied and worth less than a million dollars. This insurance is only available for mortgages with amortization periods of 25 years or less.
- 5. Land Transfer Tax Rebates
The province, and some municipalities, levy a land transfer tax when you buy a new home. For first-time homeowners, the province can provide a rebate of up to $2000. This is often enough to completely cancel out the taxes on smaller homes.
- 6. Home Buyer’s Plan
The Home Buyer’s Plan lets you “borrow” up to $50,000 from your RRSP to go towards buying a new home. It works by allowing you to withdraw your money without the normal taxes.
The Home Buyer’s Plan lets you “borrow” up to $50,000 from your RRSP to go towards buying a new home. It works by allowing you to withdraw your money without the normal taxes.
However, under the Plan, you have to pay back this money within fifteen years. It is only available if you have not occupied an owned home for at least five years.
If you’re looking to purchase a home for the first time, be sure to explore all your options to see if you can save while you spend.
