At Mortgage For Less we have assisted many first-time home buyers purchase their first home with only 5% down. Since the 5% down program was started by the Canadian Mortgage and Housing Corporation it has given people right across Canada the opportunity to own their own home – and it was changed recently to allow anybody to buy with 5% down so you no longer even have to be a first-time home buyer to take advantage (Canada Mortgage and Housing Corporation insurance fees of 3.85% of the mortgage amount will be added to the home mortgage in this case).
The Canadian government allows a tax-free withdrawal from a Registered Retirement Savings Plan (RRSP) that can be used as a down payment for first time home buyers, and then repaid over 15 years. It’s actually a great way to buy your first home. There are specific guidelines for the buyer(s) to follow to qualify for this program:
A mortgage specialist from Mortgage for Less can help you figure out if your mortgage loan qualifies for this program and assist you with the process.
Land Transfer Tax Rebate
In some cities and provinces, there is a rebate available to help first-time homebuyers offset the cost of their land transfer tax. If you qualify, land transfer tax rebates are available to first-time homebuyers in the provinces of Ontario, British Columbia. There is also a land transfer tax rebate available for first-time homebuyers in the city of Toronto. Here’s how each province and city’s rebate works:
|Rebate will cover Land Transfer Tax to a maximum home value of||$227,500||$400,000||$475,000|
|Partial refund available?||50% refund if spouse does not qualify||50% refund if spouse does not qualify||Partial refund for homes valued between $475,001 – $499,999|
How much is the Refund?
The maximum amount of the refund is $2,000 in Ontario. If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. No interest is paid on this refund.
To claim a refund, you:
This tax credit exists to assist first-time home buyers with the closing costs related to purchasing their first home.
With this credit, you can receive up to 15% of your closing costs (to a maximum of $750) as a tax credit.
An individual will be considered a first-time home buyer if neither the individual nor the individual’s spouse or common-law partner owned and lived in another home in the calendar year of the home purchase or in any of the four preceding calendar years.
For more information contact Service Canada at 1-800-662-6232 or visit www.fin.gc.caBack