Buying a home is not cheap, especially in a hot market such as Toronto. Luckily, there are various governmental grants, loans, and programs to help first-time home buyers. These include tax credits, incentives, the Home Buyers’ Plan, and GST/HST rebates. Without further ado, here are the programs that can help alleviate some of the financial hurdles faced by first-time home buyers:
Federal Grants, Loans, and Rebate Programs
This federal program allows first-time home buyers to claim up to $5,000 on the purchase of their home on their personal tax year, in the year of purchase. This translates to approximately $750 saving on taxes for that year.
This program allows Canadians to withdraw up to $35,000 from their RRSP for the down payment of a new home. Couples can combine their amounts together for up to $70,000, if they are purchasing a home together. The amount can be withdrawn tax-free, but need to be repaid within 15 years.
Eligible home owners can get a rebate of up to $1,500 in GST or HST.
The Canadian Mortgage Housing Corporation (CMHC) is a Canadian crown corporation that issues mortgage default insurance. CMHC offers up to 25% rebate on their insurance premium for Canadians who build or renovate their homes with energy efficiency in mind (such as installing solar panels).
Similar to CMHC, Genworth offers mortgage default insurance. Canadians can get up to 25% rebate on their mortgage default insurance if they build a home through one of Genworth’s energy-efficient building programs. Not only will this provide cost savings upfront, it may also save you a lot of money in energy costs over the long term.
Provincial Grants, Loans, and Rebate Programs
First-time home buyers could qualify for a rebate on the first $368,000 of their home purchase, for a maximum of $4,000. Note that if you’re purchasing a home as a couple, and one of the partners has previously owned a home before, the rebate amount will be reduced.
This tax credit is part of the Ontario Trillium benefit. It offers a rebate of up to $1,187 to cover energy costs. Seniors are eligible for the maximum rebate amount, while non-seniors are eligible for up to $1,043.
Municipal Rebate Programs
Toronto Land Transfer Rebate
Canadian citizens and permanent residents residing in Toronto can get a rebate of up to $4,475, but it has to be used in conjunction with the provincial tax credit.