When you’ve been dreaming of buying your very own home for years, the day it happens is going to be a very exciting one for you! It may seem like buying a home just means you’ll be spending all your money on expenses you never thought you’d have, but there are many benefits to being a first-time home buyer.

Here’s what you need to know about being a first-time home buyer!

Land transfer taxes

 Every time a home changes ownership, the new owners need to pay something called Land Transfer Taxes. However, for first time home buyers, this fee is waived, and they do not have to pay it out of pocket. This helps to ease the costs first-time buyers need to pay and helps get them into their very first home. There may be some exceptions (like the cost of purchase) however, your lawyer will walk you through that for your specific situation.

Income tax credit

 If you purchased a qualifying home, then you may qualify for this income tax credit. Only one person (if you have a partner) can apply for it, though, for the home purchased. Additionally, you must have not lived in a home that was owned either individually or together in the past. You need to be a first-time home buyer in order to qualify for this credit, and you will be able to use it on your taxes for the calendar year in which you purchased your home.

Withdrawing from RRSPs

 Normally, if you withdraw money from an RRSP you would need to claim that as additional income on your taxes. However, there is a program called the Home Buyer’s Plan that allows you to withdraw from your RRSPs if you are going to be using the funds towards a down payment on a qualifying home.

You will need to pay back the amount withdrawn within 15 years. If you don’t repay it in that time, then you will be taxed on the amount outstanding that you haven’t paid back. Additionally, you need to have had the funds in the RRSP for at least 90 days before you have taken the money out.

GST/HST

 For new build homes, first-time home buyers may be able to get some of the HST/GST that they paid on their newly built home back. This is a federal program run across the country, and you will have to talk to the builder of your home to determine how to go about applying for this rebate.

First-time home buyer incentive

 This option is not necessarily going to be the best one for everyone. This program helps first-time home buyers to reduce their monthly mortgage obligation but still allows them to buy a home. For this program, the government is involved, and it is a shared-equity mortgage between the home buyers and the government. If this seems like an option for you, you may want to chat with your mortgage team to determine if you qualify and what the details would be.

Contact Sure Loan For You today!

If you are ready to purchase your first home, we can not only help you with your mortgage application, but we can also help ensure you get any first-time homebuyer incentives you may be eligible for. Contact Sure Loan For You for more details.

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