The time has never been better to be a first time home buyer in Ontario. With evidence low rates of interest, stable home prices and an array of great programs created specifically for first time home buyers.
The 3 main programs available for first time home buyers are the First Time Home Buyer RRSP Plan, the Ontario Land Transfer Tax Credit and the Toronto Land Transfer Tax Credit. Both the RRSP home buyers program and the Ontario land transfer tax credit are available state wide. However, if you are buying home in Toronto, the Toronto land transfer tax credit is the only grant available to you . No other cities in Ontario at this time own their personal municipal land transfer tax.
Here is a summary of the programs:
First Time Home Buyer RRSP Plan (HBP) - This plan allows a first time home buyer to withdraw up to $25,000 from their RRSPs to purchase or make a home. The withdrawn amount must be repaid within 15 years and is subject to a minimum annual repayment of 1/15 of the amount withdrawn. If the whole $25,000 is withdrawn, the least yearly reimbursement will be $1,667. However, if someone is unable to repay the minimum amount in any year, then the remaining balance amount is deposited in the tax payer's income. This is a good plan for people who have RRSP's in place however do not have sufficient funds for a down payment.
The Ontario Land Transfer Tax Credit - This is a refund of the cost of the provinces land transfer tax up to a maximum of $2,000. The first time home buyer may claim the whole maximum amount or a share of the maximum refund amount. Thus, the first time home buyer is able to purchase a home of worth $227,500 where he is exempted from paying any land transfer fees. Any amount higher than $227,500 is taxed a rate of approximately 1.5%. To qualify the property should be owner occupied.
The Toronto Land Transfer Tax Credit - Very similar to the Ontario Land Transfer Tax Credit however it only applies to homes purchased in the city of Toronto. The repayment amount is even greater at $3725. However, if first time home buyer wants to purchase a home in Toronto which is worth $400,000 will not be obliged to pay any Toronto land transfer tax . Any excess money higher than $400,000 will be taxed at a rate of 2%. To be eligible for this program, you need to check the property has to be occupied by the owner of the home.
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To see how much you can qualify for or how much your mortgage payments would be, use our Ontario mortgage calculator. Programs also exist for home buyers who have good credit (a beacon score of 650 or higher) but do not have an RRSP or a sufficient down payment. This program is not exclusive to first time home buyers. For more information, see 'No money down mortgage' on our
