First-Time Buyer

There are numerous benefits to being a first time home buyer. For example, Ontario purchases are eligible to receive the HBCT (Home Buyer’s Tax Benefit) from the government to assist with costs such as lawyers fees, inspections and land transfer taxes. A list of additional advantages are listed here:

  • The HBP (First Time Home Buyers RRSP Plan) allows for purchasers to withdraw a maximum of $25,000 from their RRSPs to buy or build their first home. The amount withdrawn must be repaid within 15 years.
  • The Land Transfer Tax Credit applies to both municipal and provincial taxes. The Ontario credit offers a refund up to a maximum of $4,000. This means first-time buyers who are permanent Ontario residents, will not pay land transfer tax on the first $368,000 of the cost of their home.
  • The HBTC (Home Buyer’s Tax Benefit) is a Government of Canada tax credit that you apply for with your income taxes. Any first time home buyer is eligible for a tax credit up to $750.

In Canada the minimum down payment amount is 5%. Purchasers who put less than 20% down are required to obtain high ratio mortgage insurance from an organization like CMHC. This insurance is an additional cost that is added to your mortgage and is calculated as a percentage of the loan. Your mortgage broker can answer any questions on this subject.

Note: If two people are purchasing a property together and both are first time homebuyers, ensure to ask your lawyer or mortgage broker how to avoid losing both first time home buyer’s eligibility. If only one person is a first time home buyer, ask how you can still be eligible for the first time home buyer exemptions.


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