27 Jan 4 Cost-Saving Programs For First-Time Homebuyers in Canada
Guess what? The real estate market in Canada is booming again. And as the economic slowly improves, now’s a better time than ever to be a first-time homebuyer. There’s also various grants, rebates, and resources from both provincial and federal government that can make things a lot easier if you are struggling to finance your first home. Here are 5 programs that our mortgage brokers at Capital Mortgages can help you fund a first-time purchase.
1. Homebuyers Plan
If you are a first-time homebuyer, you could use your RRSP contribution towards your new home. The Canadian Revenue Agency’s Homebuyers Plan enables you to withdraw up to $25,000 from your RRSP account as long as the payment is made more than 90 days prior. You will have to pay back the contribution over a 15 year period, but if you have a partner, both of you can withdraw from your individual RRSP accounts – effectively providing you with a $50,000 down payment on your new home. For more information on the Homebuyers Plan, give one of our mortgage professionals a call or refer to the official website of the Canadian Revenue Agency.
2. Energy Efficient Properties
The Canadian government is placing a greater emphasis on new energy-efficient homes in order to improve sustainability. You could be entitled to rebates and other programs from your provincial government to build an environmentally-friendly home.
3. Homebuyers Tax Credit
If you are a first-time homebuyer, and haven’t owned a property within the previous four years, you could be eligible for the First-Time Homebuyers Tax Credit scheme, which is part of the Economic Action plan from the Canadian government. The credit you will receive will be based on $5,000 multiplied by the lowest federal income tax rate for the year in which you are applying. For more information on the scheme, just refer to the Economic Action Plan website.
4. GST/HST New Housing Rebate
If you reside in an eligible province that offers both federal and provincial sales tax into HST (Nova Scotia, Newfoundland, New Brunswick, British Colombia, and Ontario), you could be due a tax rebate from the federal government. Remember to do your research as conditions and rebates will depend on the area of the country you reside in, but you could get help with the federal portion of the HST that you will need to pay on your new home. For more information on HST New Housing rebate, refer to the official website of Service Canada.