22 Sep Owning Your First Home is Shocking Easy, in Ontario
Home ownership is goal many people strive to achieve. Purchasing a house requires financial responsibility and emotionally maturity. However, many individuals may feel owning a home is out of reach for them do to the high cost of houses and uncertainty in the economy. But there are many avenues where a potential first-time buyer may find assistance in making what can be the most important purchase of their lives.
Save and Buy
The Canadian government operates the Home Buyer’s Plan. This program allow individuals to borrow a maximum of $25,000 from their Registered Retirement Savings Plan (RRSP) for a home purchase. If a husband and wife are making the purchase together, they both may borrow $25,000.
First-time buyers must meet certain qualifications to participate in the Home Buyer’s Plan.
- All parties involved in the purchase must not have lived in a self-owned home in the previous five years.
- The buyers must have a written contract to build a new home or purchase an existing structure at the time they apply for the program.
- The buyers must have the intention of using this particular home as their primary residence.
Buyers have 15 years to repay these funds to their RRSP. The repayment must begin the second year after the withdraw is made. If the total amount is not repaid with the allotted time frame, the remaining balance will be considered taxable. This taxable amount must be included on the following year’s income tax return.
Tax Assistance in Ontario
First-time home buyers in the province of Ontario may qualify for a refund of the land transfer tax. The maximum amount of this refund is $2000 and certain conditions must be met to receive these funds.
- The applicant must be at least 18 years of age.
- The applicant must not have owned a home or had financial interest in a home in any location throughout the world.
- This same rule applies to your spouse but only applies during the time you are legally married to each other.
- Buyers may apply for the land transfer tax refund at the time of the home purchase registration. They may also opt to apply for this refund within 18 month of the home registration date.
Other Canadian provinces have tax refund programs similar to the this money saving opportunity.
Another Tax Credit
The Home Buyers Tax Credit allows first-time buyers to deduct up to $5000 on their annual tax return. The percentage allowed is based on the lowest tax rate in a given year. To receive this tax credit,, certain criteria must be met.
- You or your spouse must have purchase a qualified home prior to January 27, 2009.
- You or your spouse must not have lived in a different home owned by by yourselves in the previous five years.
- These and other programs offered by the Canadian government can help many people realize their dream of home ownership.