23 Mar What are the Tax Breaks for First Time Home Buyers?
There are several programs available for first time home buyers. The most popular I would say is the Land Transfer Tax Rebate program.
Homebuyers will receive a credit of up to $4,000 off the Land Transfer Tax fee. In Toronto where the tax is roughly double, the credit can be over $8,000.
The next most popular program is the RRSP Home Buyers Plan. Under this program you can withdraw up to $35,000 from your RRSP tax- free. The funds will have to be in the RRSP for 90 days before it is withdrawn and the money has to be repaid in a period of 15 years. This can be a great tool if you don’t have money in your RRSP and you know you are buying a house over 3 months in advance. You can simply deposit the money to your RRSP and withdraw it 90 days later to buy a home, and you will receive a tax refund. The tax refund could amount to over $9,000 depending on your tax bracket. That could come in real handy when you are a new homeowner.
Another feature is that if you haven’t owned a home for a period of four years you can use this program again. It can be helpful for people that need some help getting back into the market.
Other programs available that aren’t as popular or might not have as big an impact are the First Time Home Buyers Incentive program, First Time Home Buyers Tax Credit and the First Time Home Buyer grant programs in various smaller communities.
Make sure you research these programs well in advance of buying a new home.