First Time Home Buyer? A Few Things You Need to Know - Part 2

First Time Home Buyer? A Few Things You Need to Know - Part 2

First Time Homebuyers Rebates and Incentives

Ontario Land Transfer Tax Rebate
The land on which a condo or freehold home is built is subject to Land Transfer Tax in Ontario. This tax can be significantly high. Here’s the good news for first time home buyers! You may be able to save more than 8,000 dollars with the Ontario Land Transfer Tax Rebate - $4,000 on the Provincial Land Transfer Tax and over $4,000 if you live in Toronto.
In order to qualify for the rebate, the purchaser:
Must be 18 years of age
Must be at least a permanent resident of Canada
The intention must be to occupy the home within 9 months of purchase
Cannot have previously owned a home locally or elsewhere in the world. If you are married and your spouse has previously owned a home, you don’t receive this rebate.
Federal Home Buyers' Plan
One great source for funding your mortgage down payment is your Registered Retirement Savings Plan or RRSP. The Canadian government's Home Buyers' Plan allows first time home buyers to borrow up to $35,000 from your RRSP for a down payment and it’s tax-free. Plus, if you're purchasing with a first time homebuyer, you both can access $35,000 from your RRSP for a combined total of $70,000. However, since the Home Buyers' Plan is considered a loan; you must repay the amount you withdrew from your RRSP within 15 years. First payment is due two years after you withdrew the money.
For an example if you were to buy a home in 2019, and withdraw $15,000 from your RRSP to put towards your down payment, your first payment is will be due two years later, in 2021. Also, if you decide to contribute more than your minimum annual payment in a given year, your minimum annual payment will adjust accordingly.

Federal Government’s First-Time Home Buyer Incentive Program
This is a new incentive program which was launched through CMHC in September 2019. It will provide interest-free loans of up to 5% per cent of the cost of an existing home and 10% of the price of a new home. What will happen is the monthly mortgage payments will be reduced without increasing the amount they would normally need for down payment. This incentive will be available for home buyers with qualified annual household incomes up to $120,000. The total of the mortgage and the government incentive will be capped at four times the amount of that annual household income up to $480,000. 
Those who take the incentive will be required to repay the loan after 25 years or when the property is sold. Participants can pay CMHC back at any time beforehand with no penalties.

Home Buyers’ Tax Credit
Home Buyers’ Tax Credit is a non-refundable credit that allows first-time purchasers of homes, and purchasers with disabilities, to claim a tax refund of up to $750 in the year when they purchase a home. But to be eligible for this you or your spouse or common-law partner should have purchased a qualifying home. You are a first-time home buyer, which means that you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years. Additionally, persons with disabilities are eligible for the HBTC, even if they are not first-time home buyers.

If you are looking to buy your first home, I will be happy to help you. Call me at 647-834-9928 or send me an email to

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