Incentives for First-time Home Buyers
The Canada Revenue Agency provides tax incentives and programs to Canadian first-time home buyers to help finance the purchase of their first home. These incentives include an income tax credit, a tax sheltered savings plan, and a federal tax rebate on new home costs. New home owners can minimize their overall home costs by taking advantage of these programs within the required time limits. Followings are the details of these programs:
Home Buyers' Plan (HBP)
The Home Buyers' Plan (HBP) is a program that allows you to withdraw funds from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. You can withdraw up to $25,000 in a calendar year. Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP, or they may not be deductible for any year. Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years. You will have to repay an amount to your RRSPs each year until your HBP balance is zero. If you do not repay the amount due for a year, it will have to be included in your income for that year.
First-Time Home Buyers' Tax Credit (HBTC)
For 2009 and subsequent years, the HBTC is a new non-refundable tax credit, based on an amount of $5,000, for certain home buyers that acquire a qualifying home after January 27, 2009 (i.e., generally means that the closing is after this date). The HBTC is calculated by multiplying the lowest personal income tax rate for the year (15% in 2009) by $5,000. For 2009, the credit will be $750.
Land Transfer Tax Refund for First-time Homebuyers
Ontario's Land Transfer Tax is a provincial tax payable by the purchaser of a property. First Time Homebuyers receive refund up to $2,000.00 on Ontario Land Transfer Tax, If purchasing a property in Ontario and if the property being puchased in Ontario falls within the City limits of Toronto,will receive up to $3,725.00 off your Toronto Land Transfer Tax and up to $2,000.00 off your Ontario Land Transfer Tax.
CMHC-Eligible Energy-Efficient Building Programs
CMHC encourages the development of more energy-efficient homes by making eligible a broader range of home building programs. Homes built under the programs qualify for a 10 per cent mortgage loan insurance premium refund, and a premium refund for a longer amortization period (if applicable) when CMHC Mortgage Loan Insurance is used to finance their purchase or construction.
EcoENERGY Retrofit Program
Homes program provided grants up to $5,000 to help homeowners make their homes more energy-efficient and reduce the burden of high energy costs. Among other eligibility criteria, participants needed to obtain a pre-retrofit evaluation by a certified energy advisor using the EnerGuide Rating System before starting work and a post-retrofit evaluation within program deadlines. Homeowners are encouraged to act now to take advantage of this special, limited-time offer.