When buying your first home in Brampton or the GTA, take advantage of the available programs and incentives that can help you before and after you buy your home. After all, there is no point in leaving any money on the table!
- First-Time Buyer Incentive Program
With this newly available program, you can apply to receive a financial boost of 5 percent of the cost of an existing home, or 10 percent of the purchase price of a new home. This program is available to first-time buyers in Canada who have the minimum 5 percent down payment required for an insured mortgage. With the maximum allowable household income of $120,000, the top purchase price would be approximately $505,000 if you have 5 percent down payment, and about $565,000 for 15 percent down. Since this is a shared equity program, you will be required to pay the incentive back after 25 years, or when you sell the home, based on the property’s increased or decreased fair market value.
|
No Incentive |
5% Incentive |
10% Incentive |
|
|
Purchase Price |
$500,000 |
$500,000 |
$500,000 |
|
5 Percent Down |
$25,000 |
$25,000 |
$25,000 |
|
CMHC Incentive |
$0 |
$25,000 |
$50,000 |
|
Mortgage Required |
$475,000 |
$450,000 |
$425,000 |
|
Mortgage Plus Mortgage Insurance |
$494,000 |
$463,950 |
$436,900 |
|
Monthly Payment |
$2,260 |
$2,122 |
$1,999 |
|
Monthly Savings |
$138 |
$261 |
|
|
Yearly Savings |
$1,656 |
$3,132 |
Assumes 25 yr am, 5 yr term at 2.69%
- RRSP Home Buyer’s Plan
First-time buyers can withdraw up to $35,000 per person tax free from their RRSPs to buy or build a qualifying home, which can be a big boost to your overall down payment amount, and may help you reach the 20 percent down you need to not pay mortgage default insurance premiums. You are required to repay the withdrawn funds on a 15-year repayment plan that begins the second calendar year after withdrawal in order to avoid paying taxes on the withdrawn amount.
- Land Transfer Tax Rebate
Land transfer tax, which will be a percentage of your new home’s purchase price, is typically a very big surprise to Brampton and Greater Toronto Area first-time homebuyers because the amount can be substantial. In Ontario, home owners can receive a full or partial rebate of up to $4,000. If you are thinking of buying a home in the city of Toronto, you can receive an additional rebate of up to $4,475.
- First-Time Home Buyer Tax Credit
First-time buyers can claim a portion of their home purchase on their personal tax return for the year of purchase. The $5,000 non-refundable tax credit will give you up to $750 in federal tax relief that will certainly help offset the many costs associated with a new home.
- Green House Program
Homeowners purchasing a qualifying energy-efficient home with an insured mortgage are eligible for up to a 25 percent mortgage insurance premium refund, which can be a substantial savings. If you buy a home and renovate it to make it more energy-efficient you can also apply for this refund. If you are buying with 5 percent down, your mortgage insurance premium will be 4 percent of your purchase price minus your down payment.
- HST New Housing Rebate
If you are purchasing a new construction home or performing significant renovations to an existing home, you can recover some of the HST that you paid if all eligibility conditions are met. Canada Revenue Agency’s Guide titled GST/HST New Housing Rebate (RC4028) has all the information that you’ll need. Submit the form that applies to you along with your personal income taxes within two years of your closing date.
If you have questions, I’m here to help! Without a doubt the mortgage and home buying world is complicated! It’s important that you get expert advice well before you start looking for your new home in Brampton and the GTA. Please get in touch for a review of your situation and advice that can save you time, money and stress!
