To quote the incredible Kristen Wiig in the cinematic masterpiece, Bridesmaids, ‘Help me, I’m poor’.
This is a phrase we hear all too often when talking to first time buyers looking to break into the real estate market. And while there is no arguing the market is not where it was 25 year ago, there are still plenty of opportunities for the younger generations to invest in real estate.
In Canada, first time home buyers have exclusive access to programs, credits and rebates to support new home owners on their real estate journey. Here are 4 incentives to look into when buying your first home.
First Time Home Buyers Incentive
Eligible first-time home buyers who have a minimum down payment for an insured mortgage can apply to finance a portion of their home purchase through a shared equity mortgage with the government of Canada. With this incentive the government provides…
- 5% or 10% for a first-time buyer’s purchase of a newly constructed home
- 5% for a first-time buyer’s purchase of a resale (existing) home
- 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home
The incentive is available to first-time homebuyers with qualified annual incomes of $120,000 or less. A participant’s insured mortgage and the incentive amount cannot be greater than four times the participant’s qualified annual income.
➤ To learn more about the early stages of the buying process check out:
- How Do Lenders Assess My Buying Power
- I Want To Start Shopping For My First Home. What’s Next?
- The Mortgage Stress Test What Is It?
Home Buyers Amount
Allows you to withdraw up to $35,000 from your RRSP Tax-Free, with repayment starting 2 years after your purchase, and complete repayment within 15 years.
The Home Buyers Plan
If you are a first-time home buyer, you can claim a $5000 income tax credit on a qualifying home acquired within the year. This will provide up to $750 in federal tax relief. Discuss with your tax preparer prior to filing your income tax after you buy.
➤ For information on the later stages of the buying process read:
- The Costs Of Buying A Home What You’ll Owe At Closing
- 5 Mistakes To Avoid When You’re Buying- A Home
Land Transfer Tax Rebate
In Ontario the government charges something called a Land Transfer Tax to buyers. A rebate of land transfer tax may be available up to $4000 for first time buyers, subject to certain limitations. Such limitations include, you must be at least 18 years of age, you cannot have owned a home or an interest in a home anywhere in the world, and your spouse cannot have owned a home or interest in a home, anywhere in the world while he or she was your spouse.
Coupled with strategies such as the BRRR method, these incentives can provide a solid foundation for first time buyers of any age.
If you have a first time buyer in your life, we are here to help. Our own Megan Beam is an expert in working with first time buyers. This year Megan has helped numerous first time buyers break into the market, coming out victorious in competition against multiple offers on numerous occasions.
Contact Megan today at megan@vangeestgroup.com to kick start your home buying process.
