First-Time Home Buyers
Everyone who owns a home today was a first-time home buyer at some point. If you’re thinking of buying your first home soon, you can save money by taking advantage of government incentives. There are several first time home buyers’ incentives.
First-time home buyers incentives save you on closing costs and reduce the total cost of your first home.
First-Time Home Buyer Incentive:
The First-Time Home Buyer Incentive is a new program that eases the burden of mortgage payments. If you’re purchasing your first home, you can use the incentive to reduce your monthly payments. The incentive is a shared-equity mortgage with the Canadian Government. The Government of Canada will share the ownership of your home in exchange for:
- 5% or 10% of the purchase of a newly constructed home
- 5% of the purchase for an existing home
With the First-Time Home Buyer Incentive, you could save on the amount of your down payment upfront. The Government also shares in the housing market’s risk by owning a portion of your home’s value. You then have 25 years to repay the incentive.
First-Time Home Buyer’s Tax Credit:
This tax credit may allow you to recover some of the costs of purchasing a new home. You can use it to offset expenses like:
- Closing costs
- Legal fees
RRSP Home Buyer’s Plan:
You may be eligible for this plan if you haven’t purchased a home during the last 4 years. The RRSP Home Buyer’s Plan allows you to borrow up to $25,000 from your RRSP plan to help fund your mortgage’s down payment. The loan is tax-free, but you need to make sure the money is in your RRSP at least 90 days before the date of purchase.
Land Transfer Tax Rebate:
The land transfer tax usually costs between 0.5% and 2% of the property’s value. It is the single largest closing cost associated with buying a home in Canada. However, some Provinces will offer you a rebate on a portion of the land transfer tax.
Take Advantage of the First-Time Home Buyer Incentives!
Purchasing a home is already expensive. Using first time home buyers incentives allows you to save on closing costs and reduce the total cost of buying your first home. Check today to see which incentives are available for you.