As a first-time homebuyer, you can use all the financial help you can get! That’s why it’s important to be aware of the various programs available to offset homebuying costs as well as help fund your down payment, which can prove challenging.

5 Key Programs to Keep in Mind

1. RRSP Homebuyers’ Plan (HBP). This is a great program, as it allows first-time buyers to tap into existing resources. Offered by the federal government, the HBP enables you to withdraw funds from your RRSPs, tax- and interest-free, to use towards the purchase of your home. Both you and your spouse/partner can each withdraw up to $25,000 for a maximum total of $50,000. Because this program is considered a loan, the funds must be repaid to your RRSPs within 15 years.

2. First-Time Homebuyers’ Tax Credit (HBTC). Offered to help offset closing costs associated with buying your home, the HBTC allows you to claim up to $5,000 on your personal tax return, resulting in up to $750 in your pocket. You must apply to receive the credit on the tax return in the same year you purchase a home.

3. Land Transfer Tax Refunds – Ontario & Toronto Rebates. These programs are designed to help first-time buyers offset the cost of land transfer tax, which is an unwanted, yet necessary, homebuying cost. As a first-time homebuyer in Ontario, you may be eligible to receive a rebate of up to $4,000. It’s important to note that any purchaser must never have previously owned a home, or even an interest in a home. You can apply for the rebate through your real estate lawyer at the time of closing. And, if you’re a first- time buyer in Toronto, you can qualify for a land transfer tax rebate equal to the full amount of your municipal land transfer tax, up to a maximum of $4,475. Both new and existing homes qualify but, like the Ontario rebate, neither you nor your spouse are eligible if you previously owned a home.

4. GST/HST New Housing Rebate. If you’re purchasing a newly-built home from a builder, or are custom-building your own home, you may qualify for a rebate of the provincial GST or federal part of the HST that you paid on the home. The new home rebate application must be filed within two years of the new home’s closing date.

5. Ontario Homeownership Savings Plan. Saving for a down payment takes time. This option offers a welcome tax break on the amount you’re saving, up to $2,000. To qualify, you must be earning less than $40,000 per year, or have combined spousal income of less than $80,000 per year. The tax credit is based on your net income as well as the amount deposited into the plan.

Have questions about first-time buyer programs or your mortgage in general? Answers are a call or email away!