The Government of Canada's Home Buyers' Plan is a popular option for prospective Ontario homeowners who are trying to obtain the capital they require for buying their ideal house or condo. This plan allows qualified buyers to withdraw a maximum of $25,000 from their RRSPs in order to purchase or build a house. If your spouse is also eligible, you can each withdraw up to $25,000 towards the down payment, allowing for a possible total withdrawal of $50,000. No income tax is deducted from these funds, as long as they are repaid to the RRSP according to a predetermined repayment schedule set out by the Government of Canada.
Generally, you may participate in the plan if you (or your spouse) have not owned a home which you occupied as your principal residence in the last five years.
Repayment Schedule - The money you withdraw from your RRSP must be repaid over a period of no more than 15 years, in order for your plan to retain its tax deferred status. Your repayment period starts the in the second year after you make your withdrawals.
For more information on the Home Buyers’ Plan, contact an Ontario REALTOR® today or visit the Canadian Customs and Revenue Agency web site at: cra-arc.gc.ca
With as little as five per cent down payment, all Canadian home owners now have access to mortgage insurance through the Canada Mortgage and Housing Corporation (CMHC). This means CMHC may insure the mortgage on your home (against default in payments) for up to 95 per cent of the lending value of the home. The mortgage insurance premium is based on a sliding scale. The premiums can be added to the mortgage paid on a monthly basis.
For more information, go to CMHC's web site at: cmhc-schl.gc.ca and search for 'Mortgage Loan Insurance'.
First-time buyers of newly constructed homes may receive a refund of the provincial portion of land transfer tax – up to a maximum of $2,000. The only individuals who may qualify as first-time home buyers are those who are at least 18 years of age, have not owned an interest in a home anywhere in the world, and whose spouse has not owned an interest in a home anywhere in the world. Effective December 17th, 2007, this rebate applies to all homes.
To get detailed information on the Ontario provincial government’s Land Transfer Tax Rebate, please visit their helpful information web page at: rev.gov.on.ca