If you’re buying a home for the first time, know that different tiers of the government offer you grants that can make buying a home economical. Here are the grants you can make use of for assistance.
First-Time Home Buyer’s Tax Credit
According to the prevailing taxation rates, the Home Buyers’ Tax Credit stands at a rebate of around $750 for people buying a home for the first time. First announced by the federal government in the budget for 2009, the grant makes it possible for you to economize on some of the purchase expenses such as home inspections, land transfer taxes, and applicable legal fees. Here are the conditions you need to meet.
- You need to apply for the non-refundable credit within the purchase year.
- If you have bought the home in partnership with your spouse, friend, or partner, the combined credit you both claim cannot go above $750.
- The house you buy should be “qualified” or a new or existing property in Canada.
- You must plan to move into the house within a year of purchasing it.
- Homes can be condos, semi-detached, detached, mobile homes, or any other.
- You must register the property on your own or spouse’s name. At the time of submitting your claim, you need to provide the complete paperwork needed.
- You should not be a homeowner for 4 years before you claim the rebate.
- You should not have lived in a home belonging to your spouse in a 4 years’ period.
Land Transfer Tax Rebate
Residents of the City of Toronto and provinces such as Prince Edward Island, British Columbia, and Ontario can qualify for a refund or rebate on a portion of the land transfer tax they pay when buying a house for the first time. If you live in Toronto, you can receive the rebate in addition to the refund available to residents of Ontario.
RRSP Home Buyer’s Plan
Should you withdraw any amount from your RRSP, you’ll have to pay an income tax on it since it is considered taxable income. However, if you’re making the withdrawal to buy a house for the first time, the government allows you to borrow up to $25,000. Here are some conditions you must meet.
- You should not be a homeowner in the last 4 years before the purchase.
- You should not have lived in a home owned by your spouse in the last 4 years.
- The borrowed amount from your RRSP must be repaid.
- You are required to begin making payments towards the mortgage 2 years after the purchase of the property. The mortgage should be cleared within 15 years.
GST/HST New Housing Rebate
As a Canadian citizen, you can claim a refund on the GST or HST that you have paid to the federal government when buying a new home. You can also claim a rebate for making renovations to existing property or reconstructing property that was destroyed by fire on condition that the property was your primary residence. The home can be a modular home, floating or mobile home. As a resident of Ontario, you can claim a rebate on the provincial portion of the HST you paid when buying or renovating your home.