Did you know that there are a number of programs available to first time home buyers to help them save money or make the cost of entry more manageable?

Here’s a few of them:

1: The Home Buyer’s Plan
One of the oldest and possibly most well known programs, the Home Buyers’ Plan (HBP) allows you to withdraw from your RRSP (registered retirement savings plan) to buy or build a qualifying home. Limited to $60,000 you have 15 years to repay the funds to your RRSP.

2: FHSA Account
A newer plan created in the last few years, the first home savings account is a registered plan for first time home buyers that allows you save funds tax free, deducting the contributions from your income tax return. Starting with contribution room for up to $8000 the first year, the amount you can save increases by $8000 each year up to a maximum of $40,000.

You can keep an FHSA account open for a maximum of 15 years, or until the end of the year you turn 71. If you don’t use it to buy a home by then you can transfer it to an RRSP if you have the room or withdraw it as taxable income.

3: Land Transfer Tax Refunds
Did you know that when you buy property in Ontario you need to pay the Ontario land transfer tax? If the property is in Toronto, you also need to pay Toronto’s municipal land transfer tax.

The amounts can be significant (there’s a link to a calculator below), but if you are a first time home buyer there are refunds available in both Ontario and Toronto for all or a part of the tax (links below).

This is by no means an exhaustive list, there are other tax credits available depending on what you are purchasing, and some cities have their own incentives for first time buyers so its a good idea to “do your homework” before you purchase. Reaching out to the city hall in the municipality where you will be buying is a good idea to see what programs they might have available.

Q U I C K L I N K S

As always, if you have any questions or would like further information, please don’t hesitate to ask.

Simon