Essential info about the first-time buyer programs-grants in Canada

With the economy of Canada growing at increasing pace, it is natural that the real estate market is booming as well. The business climate is another factor that adds up to the development of real estate in the country. As a result, the government of Canada tries to meet the demands of the society and create more and more opportunities. 

First-time home buyer programs are vivid examples of the government's endeavors to minimize real estate expenses of its citizens.

Benefits of first-time buyer programs

Of course, it goes without saying that the first and most important benefit of first-time buyer programs is the financial help that is guaranteed under the rules of such programs.

Speaking in detail, the most valuable thing they offer is mortgage flexibility. It means that:

•    You can receive your mortgage even if you have a bit lower credit score than average. For lots of us, it is a great advantage.

•    The mortgage you are about to take can be co-signed by your family members or other people who can and want to help you with your real estate opportunity.

•    And, finally, the down payment. It is probably the best advantage any first-time home buyer program has to offer because it constitutes only 3.5% of the loan.

Three most popular first-time buyer programs in Canada

1)    Home Buyer's Plan

Who is eligible?

-    The one condition the majority of first-time homebuyer programs require is not to have owned a house for the last five years. This rule is applicable both to you and your spouse.

-    The house you are buying has to be your principal residence, and this point has to be proved by written agreement.

What does it offer?

-    $25,000 is the amount you can take from your RRSP to fund the purchase of your property.

-    What is more, the amount can double because both you and your spouse can each take the credit.

-    You are given 15 years to repay this back into your RRSPs without tax implications. Such an opportunity is one of the reasons this credit is widely popular.

2)    First-time Home Buyers' Tax Credit

Who is eligible? 

-    HBTC can be granted to you or your spouse under the condition that you nor your spouse owned property within the five previous years.

-    Note that your home has to be registered to those qualifying for HBTC.

-    The tax credit is claimed on your annual income tax return.

-    To calculate the amount of refund you can receive, you have to multiply the lowest personal income tax rate for the year by $5,000. As based on the data of previous years it will be about $750.

3)    Land Transfer Tax Refund

Who is eligible?

-    Both you and your spouse are eligible if you have not owned a house anywhere in the country.

-    The refund will be granted to you as soon as you register your purchase or within 18 months.

What does it offer?

-    You pay the land transfer tax on your home, and in return, the government can award you up to $2,000 of refund in the LTT program.

If this information was of interest to you, but there you still have some questions, please contact Ron Christensen of Royal LePage Solutions at 403-861-7770 or email ron@ronchristensen.ca.