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Yes!! The first time home buyer rebate is part of Canada’s Economic Action Plan to alleviate some of the harrowing costs involved in buying your first home. The first time home buyer tax credit and first time home buyer rebate are designed to help new homeowners cover some of their expenses.
Started in 2009, the first time home buyer rebate or tax credit offers an amount up to $750 to all qualifying first time home buyers. It may seem like a small amount compared to the whopping price of a home. However, it offers some amount of cost relief when you’re buying your first home in Toronto.
You can find a detailed account of the First-Time Home Buyer Tax Credit on the Government of Canada’s website here.
Eligible first time home buyers can receive first time buyer tax returns in Toronto, which include a maximum land transfer tax rebate amount of $4,475 on their Municipal Land Transfer Tax and up to $4,000 on their Provincial Land Transfer Tax.
Purchasers must apply within 18 months of purchase to obtain their first time home buyer tax credit in Toronto – namely the first time Home Buyer Land Transfer Tax rebate. You can use this Form to apply for the Ontario Land Transfer Tax Refund.
Announced as part of the 2020 Federal Budget are two First Time Home Buyer Incentive programs that could help Canadians overcome some of the financial hurdles of landing their first home.
The first is a Home Buyers Plan that enables home buyers to buy or build a home by withdrawing funds from their Registered Retirement Savings Plans (RRSPs). It allows an additional $10,000 allowance for the Home Buyers’ Plan. The home could be for themselves or any disabled person who’s related to the homeowner.
With this provision, eligible home buyers can now withdraw up to $35,000 from their RRSPs (multiple RRSPs that the homeowner owns can be used for withdrawal) as an interest-free loan (up from $25,000) to assist with the down payment on a property. The loan needs to start being repaid two years after the year of withdrawal, with a total of 15 years to repay the amount that was withdrawn.
Again the eligibility is based on whether the homeowner is a first time home buyer and whether they (or the related person with disability) intend to use the home as their primary place of residence within a year of its purchase or construction. In addition, several other conditions apply, one of which is that they must be a Canadian resident at the time of withdrawing funds from their RRSPs.
The CMHC Shared Equity Mortgage is a $100-million lending fund that aims to make affordable home ownership a reality. The program started on July 31st, 2019 and will be completed over a span of 5 years.
Under two possible funding streams, the Preconstruction Loans – Stream 1 and the Shared Equity Mortgages (SEM) – Stream 2, the program provides repayable loans, depending on eligibility. However, homebuyers cannot gain relief from the shared equity mortgages of both the first time home buyers incentive program and the SEMP fund. Some other restrictions apply too.
The incentive would allow home buyers earning $120,000 or less per year who are applying for an uninsured mortgage (anything less than a 20% down payment) to be eligible for an interest-free loan from the Canadian Mortgage Housing Corporation (CMHC) of up to 10% of the purchase price.
You can read about both of these new First Time Home Buyer Incentives in detail here.
We’ve put together everything you need to know so you feel confident and well-informed before buying your first home. Download our FREE First-Time Buyers Guide today.
