The following are the programs offered in Ontario for eligible First Time Home Buyers:
- Land Transfer Tax Rebate (LTT rebate)
- Home Buyers’ Plan (HBP) and RRSP withdrawal
- GST/HST New Housing Rebate
- First Time Home Buyer Incentive (2nd Mortgage)
- Home Buyers’ Amount – Federal Tax Credit
Land Transfer Tax Rebate
What is it?
The Land Transfer Tax (LTT) rebate is offered to first time home buyers in Ontario. The maximum rebate amount offered in Ontario is $4,000.00 for the Provincial LTT rebate and for homes located in Toronto, a maximum rebate amount of $8,475.00, which includes the $4,000.00 Provincial LTT rebate and the $4,475.00 Toronto LTT rebate.
Who is this rebate offered to? Are you eligible?
- The rebate is offered to first time home buyers who are at least 18 years old
- Residents of Canada (must be Canadian Citizens or Permanent Residents)
- Who have never previously owned a home or had an interest in a home, in Canada or anywhere in the world.
- If you are married and are a first-time home buyer, your spouse cannot have ever owned a home or had an interest in a home, in Canada or anywhere in the world while you were married.
- If you are married and are a first-time home buyer, you are able to claim your rebate share and your spouse’s rebate share if your spouse has not owned a property while you were married (i.e., your spouse sold the property before you married and currently does not own or have an interest in any property).
Home Buyers’ Plan (HBP) and RRSP withdrawal
What is it?
The Home Buyers’ Plan allows first time home buyers to withdraw from their Registered Retirement Savings Plan (RRSP) to buy or build a home for themselves. The HBP withdrawal limit is currently set to $35,000.00.
Who is the refund available to? Are you eligible?
- The purchaser must be considered a first-time home buyer, which by definition would be a purchaser who, in a four-year period, did not occupy a home that they owned, or a home that their current spouse or common-law partner owned.
- The four-year period means the four years prior to a home purchase. The period begins on January 1 of the fourth year before the year you withdraw funds from your RRSP, and ends 31 days before the date you withdraw the funds.
- you must be a resident of Canada
- You must intend to occupy the qualifying home as your principal place of residence within one year after buying or building it.
- In all cases, if you have previously participated in the HBP, you may be able to do so again if your repayable HBP balance on January 1st of the year of the withdrawal is zero and you meet all the other HBP eligibility conditions.
- See the following link and talk to your bank for the application process: https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html
GST/HST New Housing Rebate
What is it?
The new housing rebate allows purchasers to recover a portion of the HST that new build home buyers must pay.
Who is the refund available to? Are you eligible?
- The new house rebate is available for purchaser’s who will use the property as their primary residence. NOTE: this rebate is not exclusive to first time home buyers, it is available to anyone who will occupy the property as their primary residence.
- The vast majority of new construction sales list the purchase price as inclusive of the HST rebate on the assumption that the purchaser qualifies for the rebate and they must confirm the same to the builder on closing, so no additional rebate will be available to the client on closing.
- The new house rebate is not available for corporations or individuals using the property as their investment or rental property.
- A different form of rebate (GST/HST New Residential Rental Property Rebate) may be available under these circumstances and can be claimed after closing.
- See the following link: https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4231/gst-hst-new-residential-rental-property-rebate.html
First-Time Home Buyer Incentive
What is it?
The First Time Home Buyer Incentive is to assist individuals on purchasing their first home. This program offers purchasers the options of 5% or 10% of the purchase price as financing that can be used to purchase the home. The purchasers can pay back the amount when they sell their property within 25 years of purchase.
This program is a shared equity mortgage. This means that the government shares in the upside and downside of the property value
For Example – It works like this:
- You receive a 5% incentive of the home’s purchase price of $200,000, or $10,000. If your home value increases to $300,000 your payback would be 5% of the current value or $15,000.
- You receive a 10% incentive of the home’s purchase price of $200,000, or $20,000 and your home value decreases to $150,000, your repayment value will be 10% of the current value or $15,000.
Who is the incentive available to? Are you eligible?
In order to be eligible for the incentive, there are a few criteria that must be met:
- Purchasers’ total annual income cannot exceed the amount of $120,000 or $150,000 if purchasing a home in Toronto
- The borrowed amount must not be more than 4 times their qualifying income, or 4.5 times in Toronto
- The purchaser or their partner are first time home buyers
- you did not occupy a home that you or your current spouse or common-law partner owned in the last 4 years (the 4-year period begins on January 1 of the fourth year before the Incentive is funded and ends 31 days before the date the Incentive is funded)
- Purchasers are Canadian citizens, permanent residents or non-permanent resident with authorization to work in Canada
- The Incentive is like a second mortgage on your home. Your first mortgage must be greater than 80% of the value of the property and is subject to a mortgage loan insurance premium.
Home Buyers’ Amount – Federal Tax Credit
What is it?
The Home Buyers’ Amount offers a $5,000.00 non-refundable income tax credit amount on a qualifying home acquired during the year. For an eligible individual, the credit will provide up to $750.00 in federal tax relief.
Who is the incentive available to? Are you eligible?
In order to be eligible for the incentive, the following criteria must be met:
- You or your spouse or common-law partner acquired a qualifying home
- You did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years (first-time home buyer)
- The following are considered qualifying homes:
- single-family houses
- semi-detached houses
- townhouses
- mobile homes
- condominium units
- apartments in duplexes, triplexes, fourplexes, or apartment buildings