Program for First Time Home Buyers
The government of Canada and Ontario have established a cumulative program to assist first time home buyers.
The RRSP Home Buyer’s Plan allows you to withdraw up to $20,000 from RRSP tax free program. To qualify for it, you and your spouse must not have lived in the home to which you are applying for. If meeting the criteria, both you and your spouse can withdraw up to $20,000 each, meaning a total of $40,000.
Before entering into the RRSP program, you have to provide a written agreement explaining your intentions to buy or build a home as your principle residence. Please note that cottages are not included in this plan, as they are not considered principle residence.
To withdraw the money, there is a criteria that it should be in your RRSP for at least 90 days. If you have signed an Agreement of Purchase and Sale and there are still 90 days remaining until the closing, then you can open an RRSP to make a contribution. After that, you will receive the tax deferred benefit and then you will be fully entitled to withdraw that money again from the RRSP for the purchase of property.
Since the program is associated with federal government, the money withdrawn from it should be paid within 15 years. If somehow you do not payback the RRSP amount within 15 years, the outstanding amount will be then counted with tax when you will go to file your income tax return.
Ontario Home Ownership Savings Plan
Under this plan, buyers get a tax credit for contributions of up to $2000 of the plan per year. As a property buyer, you can use the savings came under this plan for the purchase of homes. The qualification criteria for this program is also very simple. If you are a lone buyer, then you have to earn less than $40,000 to qualify for this program. Meanwhile, if both you and your spouse are working, then you have to earn less than $80,000. You can get further legal information about this plan from us. We will help you to know all the legal points and obligations that are stated in this program.
Land Transfer Tax Rebates
As defined in the law, if you are purchasing a newly built home as a First Time Home Buyer, then you can also be eligible for a Land Transfer Tax Rebate. Amity Law Professional Corp. will help you to know more about it if you will quality for the program.
