As a first time home buyer, you are going to want to be aware of various programs that may apply to your circumstances. For that reason, we’ve gathered a few a resources to help you through the process.
Introduced by the federal government in 2009, this credit was created to help ease some of the costs associated with buying your first home. The First-time Home Buyer’s Tax Credit is a non-refundable credit and is valued at $750.
This plan is very advantageous on helping get a down payment on your home without paying any taxes. This plan allows you to take $25,000 out of your RRSP tax free to put as a down payment on a home. Normally, early withdrawals out of RRSPs count as taxable income which this plan allows you to bypass.
Please note that the money in your RRSP must be in the account for at least 90 days before withdrawal. As you are loaning money to yourself, you must start repaying the amount borrowed from the RRSP two years after you buy over a 15-year period.
Mortgage insurance — also known as CHMC insurance is to many a weird concept, but fairly simple. This insurance will most likely apply to you if you are putting less than a 20% downpayment on a home. The insurance is not to cover you, but the lender in the case that you don’t make your mortgage payments.
This also enables the consumer(you) to purchase a home with for example a 5% down payment with interest rates comparable to those of a 20% downpayment.
To get this insurance, your lender must purchase this and then pass the cost on to you. You can either pay this sum upfront, or tack it onto your mortgage payment.
If you have or are planning on significantly renovating an existing home, building a new home, or rebuilding a home that was destroyed due to fire, this rebate is for you. In any or all of these cases, you will be charged GST/HST that can be rebated to qualifying Canadians.