By: Julia Aidan
Submitted: 2010-02-11 06:30:10 | Word Count: 527
If you are a first home buyer in Ontario, it is the perfect time to think about. With record low interest rates, constant home rates and an array of good programs made particularly for first time home buyers.
The First Time Home Buyer RRSP Plan, the Ontario Land Transfer Tax Credit as well as the Toronto Land Transfer Tax Credit are the three major plans that the government has presented for the people who want to buy home for the first time in Ontario. Both the RRSP home buyers plan and the Ontario land transfer tax credit are presented province wide. However, if you are buying home in Toronto, the Toronto land transfer tax credit is the only grant available to you . No other places in Ontario at this time own their personal municipal land transfer tax.
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Here is a summary of the programs:
First Time Home Buyer RRSP Plan (HBP) - This program helps a first time home buyer to remove up to $25,000 from their RRSPs to buy or build a house. You need to repay the amount you withdrew within 15 years which should be repaid annually at the minimum amount of 1/15 of the withdrawn sum. If the whole $25,000 is withdrawn, the least annual refund will be $1,667. If less than the minimum is repaid in any particular year, the balance is added to the taxpayer's income. This is a good program for individuals who have RRSP's in place but don't have enough money for a down payment.
The Ontario Land Transfer Tax Credit - This loan helps to repay the expenses of the regions land transfer tax to highest of $2000. The first time home buyer may ask for the complete maximum amount or a part of the maximum refund amount. This will allow a first time home buyer to purchase a home up to $227,500 without having to pay any land transfer fee. Any amount higher than $227,500 is taxed a rate of nearly 1.5%. To be eligible the property should be owner occupied.
The Toronto Land Transfer Tax Credit - Very similar to the Ontario Land Transfer Tax Credit however it only applies to homes purchased in the city of Toronto. The reimbursement amount is also more at $3725. However, if first time home buyer wants to purchase a home in Toronto which is worth $400,000 will not be obliged to pay any Toronto land transfer tax . Any excess amount above $400,000 will be taxed at a interest rate of 2%. To qualify the property must be owner occupied.
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To see how much you can qualify for or how much your mortgage payments would be, use our Ontario mortgage calculator. Programs also exist for home buyers who have good credit (a beacon score of 650 or higher) but do not have an RRSP or a sufficient down payment. This program is not exclusive to first time home buyers. For more information, see 'No money down mortgage' on our Ontario first time home buyer page. If you would like more information on any of these programs, please contact me at www.ontariomortgagesuperstore.com.
