When you’re buying a condo, a townhouse, or a detached house, there are government credits & rebates to make it easier for you.

Today I share four (4) of the biggest credits/rebates available to first-time home buyers.

1. Land Transfer Tax [Rebates]:

One of the biggest closing costs when you buy a home is the land transfer tax.

Here in Ontario there is a Provincial Land Transfer Tax, and if you live in the City of Toronto they have an additional “municipal”  L.T.T.

Land transfer tax rates are generally between 0.5 and 3.0 per cent of the home purchase price.

Both Ontario & Toronto offer rebates  for  first-time home buyers.

These programs reimburse some, or all, of your land transfer taxes. Toronto has a rebate up to $4,475 & Ontario a rebate up to $4,000.

NOTE: if you’re buying the home with someone who is not a first-time home buyer, this may prevent you from qualifying for some, or all, of the rebate.

2.  The First-Time Home-Buyer Tax Credit:

The Home Buyers’ Tax Credit allows first-time home buyers to claim $5,000 of a property purchase on their tax return. With current tax rates, that results in a $750 rebate.

#3. The First-Time Home-Buyer Plan!

The Home Buyers’ Plan (HBP) is not a credit per se.

It’s a way to increase your down-payment using money from your (RRSP). It effectively increases how much mortgage you qualify for & afford to carry!

First-time home buyers can withdraw up to $35,000 from their RRSP, but it needs to be repaid (on a non-deductible basis) within 15 years, to avoid a penalty.

#4. The First-Time Home-Buyer Incentive:

This is also not a rebate. This Incentive is a shared-equity mortgage with the Canadian government.

With this program, the government takes a 5 to 10 per cent stake in your home, with you retaining exclusive access.

This lets you buy a home with a smaller deposit and lowers your monthly mortgage payments.

The government contribution needs to be repaid within 25 years, based on the home’s market price at the time the incentive is repaid.

This means that if your home’s value goes up, then the government also benefits from the increase. The same happens if your home’s value goes down.

It doesn’t suit everyone. Firstly, not all homebuyers will want a shared-equity mortgage.

Secondly, the incentive has some very specific eligibility criteria, which limit the types of buyers the incentive is useful for.

Now  if  you’re  wondering  if  what  qualifies  as  a  first-time  buyer   (other  than  the  obvious)

You’re generally considered a first-time home buyer if you have not previously had any ownership stake in a home at any time.

And here’s some good news if you’re not a first-time homebuyer but you’re getting a divorce.

There are new laws recently announced that some people might qualify for first-time homebuyer incentives after divorce.

Even though someone was a home owner before their divorce this new incentive appears to consider the financial realities of some divorces & the difficulty of buying a new home after splitting assets.

Secondly, keep in mind that If you’re a first-time home buyer but your buying partner isn’t,  you may only be able to claim a portion of a program.

Finally, please keep in mind that the property you’re buying generally needs to be your main residence. Or what they refer to as “Owner  Occupied”.

Exact rules vary, but you’ll typically need to move in shortly after purchase.

And you must be a resident of Canada to apply for most first-time home buyer programs.

Some programs also require you to be a permanent resident or Canadian citizen.

If you want more information about first-time home buying incentives I can definitely answer your questions.

I can also introduce you to my favourite mortgage broker & real estate Lawyer to answer all your questions.

Be sure to check out my post/video: “How To Be a First-Time Buyer Even If You’ve Owned Before” for important definitions and criteria.

I’m always happy to chat and answer your questions.