Being a first-time home buyer is exciting but equally stressful. From getting pre-approved to finding a good first-time home buyer’s agent in Brampton, every step requires patience and time. More importantly, you also need to be aware of Ontario government incentive programs, so you maximise your benefits and find the best deal for yourself.
Let’s take a look at different benefits you’ll receive as a first-time home buyer in Ontario:
1. CMHC First-Time Home Buyer Incentive
Introduced by the Government of Canada, CMHC First-time Home Buyer Incentive program is a shared equity program that helps first-time home buyers with the down payment. According to the program, you are eligible for:
- 5% or 10% down payment funds when buying a newly constructed house
- 5% down payment funds when buying a resale property
- 5% down payment funds when buying a new or resale mobile/manufactured home
When you take advantage of this benefit, you not only receive help towards the down payment but also lets you get a lower monthly mortgage. When you sell your first time, you are required to pay back the borrowed amount at market value (according to the percentage you borrowed during the purchase).
2. Land Transfer Tax Refund
When you purchase a house, you are required to pay land transfer tax in Ontario. If you’re buying in the City of Toronto, double up that amount. As a first-time home buyer, you are eligible for:
Ontario Land Transfer Tax Refund
- Refund that maxes out at $4,000
Toronto Land Transfer Tax Refund
- Over the Ontario Land Transfer Tax Refund, you are also eligible for Municipal Land Transfer Tax that maxes out at $4,475
To be eligible for these benefits, you must
- Have never owned a home anywhere in Canada
- If you’re buying the house with someone who has been a homeowner previously, your benefits will be reduced
3. Homebuyers’ Tax Credit
Whenever you buy a home, there are a number of closing costs you need to pay for. You can’t include them in your mortgage amount and need to be paid upfront. To help first-time home buyers with the expenses, the Ontario government offers you a $5,000 non-refundable tax credit, which is equal to $750 in federal tax credits.
So, who is eligible for the homebuyers’ tax credit:
- The house should be used as your primary residence
- You didn’t live in a house owned by your spouse or you in the past 4 years
- If you buy the house with your partner, friend, or family member, it should be their first home too
- You must choose if the credit will go only to one person or divided between the homeowners
4. Home Buyer Plan for First-time Home Buyers
The Homy Buyer Plan For First-time Home Buyers lets you withdraw funds from your registered retirement savings plan (RRSP) towards your first home’s down payment or to build a house. You can withdraw up to $35,000, which needs to be repaid over a period of 15 years. You’re also allowed to withdraw the amount within 30 days of purchasing the house.
Buying a house in Brampton is a multi-step and somewhat complicated process. Having an experienced and educated realtor by your side will not only help you make the process simpler but also keep you away from common first time buyer mistakes.