FIRST-TIME HOME BUYER REBATE
These are the three ways our government gives first-time buyers a break when buying real estate:
$8,475 - Toronto/Ontario Land Transfer Tax Rebates (LTT)
$70,000 – Use up to $70,000 of your RRSPs towards the purchase ($35,000 per person)
$750 – Tax Rebate
Land Transfer Tax Rebate (Toronto + Ontario)
First-time homebuyers who live in the City of Toronto can qualify for a rebate equal to the full amount of their municipal land transfer tax, up to a maximum of $4,475. The LTT rebate applies whether you're buying a Toronto townhouse, house, or condo.
To qualify for the Toronto Municipal Land Transfer Tax Rebate for First-Time Purchasers, you must meet the following criteria:
You must be a Canadian citizen or permanent resident of
Canada,
You must be 18 years of age or older,
You must live in the home within 9 months of purchasing it,
You cannot have owned a home before, and
If you have a spouse, they cannot have owned a home during the time they have been your spouse.
Based on the Toronto land transfer tax rates, the rebate will cover the full tax amount up to a maximum home purchase price of $400,000. For homes with purchase prices over $400,000 (like everything in Toronto) homebuyers will qualify for the maximum rebate but will still owe the remainder of their land transfer tax. If you are buying your home with your spouse, but only one of you qualifies for this rebate, you can still receive 50% of the rebate.
If you qualify, your real estate lawyer will claim the rebate electronically through Teraview when he/she registers your transfer/deed.
But wait there’s more!! In addition to the Toronto rebate, you can also qualify for the Ontario rebate.
First-time homebuyers in Ontario can qualify for another rebate equal to the full amount of their land transfer tax, up to a maximum of $4,000.
To qualify for the Ontario Land Transfer Tax Refund for First-Time Homebuyers, you must meet the following criteria:
You must be a Canadian citizen or permanent resident of
Canada,
You must be 18 years of age or older,
You must live in the home within 9 months of purchasing it,
You cannot have owned a home before, and
If you have a spouse, they cannot have owned a home during the time they have been your spouse.
Based on the Ontario land transfer tax rates, the rebate will cover the full tax amount up to a maximum home purchase price of $368,333. For homes with purchase prices over $368,333, homebuyers will qualify for the maximum rebate, but will still owe the remainder of their land transfer tax. If you are buying your home with your spouse, but only one of you qualifies for this rebate, you can still receive 50% of the rebate.
Note: You have to apply within 18 months of the date of property transfer to qualify for these rebates. If you qualify, your real estate lawyer will help you file the necessary paperwork.
Canadian Home Buyers’ Plan (HBP)
One really good source of funding for your mortgage down payment is your Registered Retirement Savings Plan (RRSP). The Canadian government's Home Buyers' Plan (HBP) allows first-time homebuyers to borrow up to $25,000 from their RRSP for a down payment, tax-free. If you're purchasing with someone who is also a first-time homebuyer, you can both access $25,000 from your RRSPs for a combined total of $50,000. However, since the HBP is considered a loan, it must be repaid within 15 years.
To pull money from RRSPs, a first-time buyer must fill out and submit this form.
The First-Time Home Buyers' Tax Credit (HBTC).
This was introduced as part of 'Canada's Economic Action Plan' to assist Canadians in purchasing their first home. It is designed to help recover closing costs such as legal expenses, inspections, and land transfer taxes.
The Home Buyers' Tax Credit (HBTC), at current taxation rates, works out to a rebate of $750 for all first-time buyers. After you buy your first home, the credit must be claimed within the year of purchase and it is non-refundable. If you are purchasing a home with a spouse, partner, or friend, the combined claim cannot exceed $750.
Tip: To receive your $750 claim, you must include it with your personal tax return under line 369.
Land Transfer Tax Rebate (Toronto + Ontario)
First-time homebuyers who live in the City of Toronto can qualify for a rebate equal to the full amount of their municipal land transfer tax, up to a maximum of $4,475. The LTT rebate applies whether you're buying a Toronto townhouse, house or condo.
To qualify for the Toronto Municipal Land Transfer Tax Rebate for First-Time Purchasers, you must meet the following criteria:
· You must be a Canadian citizen or permanent resident of
· Canada,
· You must be 18 years of age or older,
· You must live in the home within 9 months of purchasing it,
· You cannot have owned a home before, and
· If you have a spouse, they cannot have owned a home during
·the time they have been your spouse.
Based on the Toronto land transfer tax rates, the rebate will cover the full tax amount up to a maximum home purchase price of $400,000. For homes with purchase prices over $400,000 (like everything in Toronto) homebuyers will qualify for the maximum rebate but will still owe the remainder of their land transfer tax. If you are buying your home with your spouse, but only one of you qualifies for this rebate, you can still receive 50% of the rebate.
If you qualify, your real estate lawyer will claim the rebate electronically through Teraview when he/she registers your transfer/deed.
But wait there’s more!! In addition to the Toronto rebate, you can also qualify for the Ontario rebate.
First-time homebuyers in Ontario can qualify for another rebate equal to the full amount of their land transfer tax, up to a maximum of $4,000.
To qualify for the Ontario Land Transfer Tax Refund for First-Time Homebuyers, you must meet the following criteria:
· You must be a Canadian citizen or permanent resident of
· Canada,
· You must be 18 years of age or older,
· You must live in the home within 9 months of purchasing it,
· You cannot have owned a home before, and
· If you have a spouse, they cannot have owned a home during the time they have been your spouse.
Based on the Ontario land transfer tax rates, the rebate will cover the full tax amount up to a maximum home purchase price of $368,333. For homes with purchase prices over $368,333, homebuyers will qualify for the maximum rebate, but will still owe the remainder of their land transfer tax. If you are buying your home with your spouse, but only one of you qualifies for this rebate, you can still receive 50% of the rebate.
Note: You have to apply within 18 months of the date of property transfer to qualify for these rebates. If you qualify, your real estate lawyer will help you file the necessary paperwork.