RRSP Home Buyers’ Plan (HBP)
The Government of Canada's Home Buyers' Plan allows qualified buyers to withdraw a maximum of $25,000 from their RRSPs to purchase or build a house. If your spouse is also eligible, you can each withdraw up to 25,000 towards the down payment, for a total of 50,000. No income tax is deducted from these funds, as long as they are repaid to the RRSP according to the government's repayment schedule.
You may participate in the plan if you have not owned a home which you occupied as your principal residence in the last five years.
The money you withdraw from your RRSP must be repaid over a period of no more than 15 years to retain its tax deferred status. Your repayment period starts the second year following the year you made your withdrawals.
For more information, go to the Canada Revenue Agency Web site at www.cra-arc.gc.ca and search for “Home Buyers Plan.”
First-Time Home Buyers' Tax Credit
A 15-per-cent credit will be applied to a $5,000 amount, and will provide up to $750 in tax relief to reduce the costs associated with first home purchases completed after January 27, 2009.
CMHC Flexible Financing
Saving a down payment may no longer be a barrier to owning a home. With little or no downpayment, all home buyers have access to the Canada Mortgage and Housing Corporation's (CHMC) mortgage insurance. With the CMHC's Flex Down incentive, the down payment may now be borrowed from any source that is
arm's length to and not tied to the property purchase or sale transaction. These sources may include: lender cash back incentives; loans from your bank or finance company; lines of credit or credit cards; gifts or grants; and sweat equity (intended for new constructions).
Flex Down is open to both new and repeat home buyers who buy a one or two-unit home in Canada and occupy it as a principal residence, and is available for mortgage loan amounts between 90.01 per cent and 95 per cent. Borrowed funds for the down payment cannot exceed 9.99 per cent.
Flex Down have the same flexibility as other CMHC Mortgage Loan Insurance products - fixed, adjustable, or capped variable interest rates and interest terms as short as six months. The mortgage insurance premium is 2.90% per cent under Flex Down. Comparable mortgage insurance may also be offered through other financial services providers.
For more information, go to CMHC's Web site at www.cmhc-schl.gc.ca and type “Flex Down” in the search engine, or call 1-888-GO emili (1-888-463-6454).
Lower Monthly Payments
To help improve access to homeownership by lowering monthly payments, 35-year flexible amortization periods. Extended amortizations are available on homeowner purchase and refinance transactions (excluding line of credit) and can be combined with the Flex Down and Flex 100 incentive. Longer amortization periods are available through other financial services providers.
CMHC also provides mortgage insurance that allows lenders to offer borrowers with a proven history of managing their credit responsibly the option of making interest-only mortgage payments for up to the first 10 years when they purchase or refinance their home. This option, available on mortgage loans of up to 90 per cent and amortization periods of up to 25 years, will give borrowers greater flexibility in managing their cash flow.
Purchase Plus Improvements
Is your dream home a “fixer-upper”? Or maybe you want to upgrade a new home? With CMHC’s Purchase or Finance with Improvements, you can add the cost of renovation to your mortgage, up to 95 per cent of the “as improved” value.
So, with five per cent down, an application for mortgage financing can be made with 95 per cent of the purchase price plus 95 per cent of the cost of improvements, based on written quotes obtained from licensed contractors.
On closing, the improvement portion of the mortgage will be withheld until the work has been completed, usually within 30 to 60 days of closing.
For more information, go to CMHC’s Web site at www.cmhc-schl.gc.ca, and type “Purchase Improvements” in the search engine, or contact a mortgage lender. More information on any of the CMHC incentives can be obtained by calling 1-888-GO EMILI
Land Transfer Tax (LTT) Rebate
First-time buyers of newly constructed homes and, as of December 2007, resale homes, may receive a refund of land transfer tax up to a maximum of $2,000.
Only individuals 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 while he or she was a spouse of the individual, qualify as first time buyers.
The purchaser must occupy the home as his or her principal residence no later than nine months after the date the property is transferred to his or her possession.
A qualifying buyer must apply for a refund no later than 18 months after registration of the home purchase if a refund is not claimed at the time of registration.
For more information, contact the Ontario Ministry of Finance at 1-800-263-7965.
Land Transfer Tax Refund For First-Time Home Buyers
Peel Region Land Registry Office
7765 Hurontario St (Hwy 10) & County Court Blvd
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