Financial Tips and Tricks for First Time Home Buyers in Ontario
By : Radu Arvatescu
Finding the money for a first time buyer down payment can be a challenge. You might dream of homeownership, but look at all of the expenses and find that you’re just not ready or even financially prepared for such a significant investment.
One of the biggest pieces of advice we can give you as the best mortgage brokers in Ontario is that you should never step back from your homeownership goals.
While buying a home can be challenging, it’s one of the best ways to secure your financial future. With all of the first time home buyer Ontario grants and first time home buyer benefits in Ontario, moving into your new home could actually be easier than you think.
From getting help with a first time home buyer down payment in Ontario to leveraging a first time home buyer Ontario RRSP program, these are the top benefits and programs to explore as you look for your first home.
TABLE OF CONTENTS
- First Time Home Buyer Tax Credit Ontario
- What is Land Transfer Tax Ontario First Time Home Buyer?
- Ontario First Time Home Buyer Land Transfer Tax Rebate
- First Time Home Buyer Land Transfer Tax Rebate in Toronto
- HBP Home Buyers’ Plan First Time Home Buyer Ontario Rules
- HST Ontario First Time Home Buyer Rebate
- Insurance for First Time Home Buyers
- First Time Home Buyer Renovation Loan
- First Time Home Buyer Incentive in Ontario
- First Time Home Buyer Qualification in Ontario
- First Time Home Buyer Ontario Grants Can Make Your Dream a Reality
First Time Home Buyer Tax Credit Ontario
Purchasing your first home is a costly process, and we’re not just talking about the listing price of the home. The mortgage, inspection fees, real estate agent fees and taxes can all add up.
Thankfully, you can take advantage of a first time home buyer tax credit Ontario. This credit is different from the land transfer credit that we will talk about in the following sections. It’s a one-off rebate with a maximum credit of up to $5,000. When combined with other programs like first time home buyer Ontario RRSP, and even tax refunds, it significantly offsets the cost of homeownership.
Almost everyone can claim this credit from the Canada Revenue Agency. First time home buyer qualification Ontario requires that you haven’t owned a home for at least four years.
Most people qualify for the first time home buyer tax credit Ontario. If you are buying a home and want to apply for the credit, make sure that:
- The home is your main residence.
- It is under your name or your legal partner’s name.
- You move into the home within a year of purchasing it.
- The home is an existing home or new construction located within Ontario or another Canadian province.
The only major exception for the first time home buyer tax credit Ontario is a cooperative unit where you have shares that allow a right to tenancy. You can only claim the credit for a coop where you have a right to possession through your shares.
With a tax credit, you could offset your first time home buyer down payment in Ontario, use the money to put towards renovation, or even pay off part of your mortgage early.
What is Land Transfer Tax Ontario First Time Home Buyer?
Whether you purchase undeveloped land or a completed home, you will be charged land transfer tax Ontario first time home buyer. This is something that many buyers don’t think about when looking for a home. Learning how to get a rebate on the tax is one of the most important financial tips and tricks you can learn.
At today’s rate, purchasing a $500,000 home in Toronto would result in a total land transfer tax Ontario first time home buyer of $4,475. This is a significant revenue driver for the provincial government. However, homeownership offers more to the economy in the long term.
This is why the Ontario Ministry of Finance offers a generous land transfer tax refund for first time home buyers. For most starter homes, this will offset the cost of the tax, up to a value of $4,000.
If you’re ready to purchase your home, you should take advantage of the rebate on land transfer tax Ontario first time home buyer. With other programs like first time home buyer Ontario RRSP, homeownership becomes more realistic.
Ontario First Time Home Buyer Land Transfer Tax Rebate
The Ontario first time home buyer land transfer tax rebate comes with a strict set of rules, but it can provide significant financial savings if you meet the general criteria.
If you decide to buy land for a new home, build a new home, or even buy an existing home, you will pay a transfer tax. If you are a first time buyer, you will be eligible for a refund, sometimes covering all of the tax that was paid. The Ontario first time home buyer land transfer tax rebate is available to any Canadian above 18 years of age.
The maximum available Ontario first time home buyer land transfer tax rebate is $4,000. This is a significant sum that could be put towards your mortgage, immediate expenses, home improvements, or your personal savings, etc.
It’s simple to apply for the land transfer tax refund for first time home buyers rebate electronically.
Unlike some federal programs where an individual becomes a first time home buyer after not having owned a home for a period of four years, the Ontario first time home buyer land transfer tax rebate can only be claimed once. Even if you sell a home and then rent for several years or decades, you won’t be able to claim this benefit again.
Combined with the low rates and competitive loan conditions that we provide through our Ontario brokerage, this land transfer tax refund for first time home buyers could put homeownership within your reach.
First Time Home Buyer Land Transfer Tax Rebate in Toronto
The above program will apply if you purchase a home in Toronto or any of the nearby areas. The first time home buyer land transfer tax rebate in Toronto provides up to $4,000 reclaimed from the tax paid on a new home or property.
If you want to apply for the first time home buyer land transfer tax rebate in Toronto, you will have to be an active taxpayer of at least 18 years of age.
The first time home buyer land transfer tax rebate in Toronto can be applied for online through the Ontario Ministry of Finance. It is one of the most valuable rebates available to first time home buyers.
In the case of this program, first time home buyer qualification in Ontario literally means ‘first time’. You can not claim the first time home buyer land transfer tax rebate in Toronto if you have owned undeveloped land or a home at any time in the past.
HBP Home Buyers’ Plan First Time Home Buyer Ontario Rules
The Home Buyers’ Plan (HBP) is a program administered by the Government of Canada, designed to make it easier for individuals and families to move into a first home. You’ve taken the step of talking to our brokerage to find the lowest rates with pre-qualification. You can get even better discounts by taking advantage of the current first time home buyer Ontario rules.
The HBP isn’t a grant. Instead, it allows you to use funds from your Registered Retirement Savings Plan (RRSP) for a first home. There are no tax consequences when you build a qualifying home. If you have a disability recognized by the Government of Canada, you may be eligible for relaxed qualification criteria.
Under the first time home buyer Ontario rules, you can withdraw up to $35,000 from your savings plan. This money can be used for a first time home buyer down payment in Ontario, to contribute to construction costs, or for repairs and renovations on a new home. As long as the funds are used to build or buy a home, you will comply with first time home buyer Ontario rules.
This is one of the most valuable programs offered by the government, but there are some RRSP first time home buyer disadvantages.
Before you apply for this program, you will need to make sure that:
- You haven’t previously purchased (within a four year period) a home in your name, even if it was sold or foreclosed. One of the RRSP first time home buyer disadvantages is that it can only be used if you or your spouse haven’t owned a home within the last four years.
- Taking money from your retirement fund could limit your savings if you retire within the next 15 years. This could be offset by the equity that you build in your home, but it’s still one of the major RRSP first time home buyer disadvantages that you need to consider.
- If you withdraw more than $25,000 using the HBP program, you will need to report any excess as income, and pay appropriate taxes.
- You must repay the money taken from the RRSP within 15 years. This period begins in the second year that you are living in your new home. This can increase your overall repayments and is the biggest financial RRSP first time home buyer disadvantage.
Even with these RRSP first time home buyer disadvantages, the program is still one of the best first time home buyer benefits in Ontario. When combined with other programs like the land transfer tax refund for first time home buyers, you’ll enjoy a significantly more affordable pathway to your new home.
HST Ontario First Time Home Buyer Rebate
One of the most compelling Ontario first time home buyer rebates is the HST New Housing Rebate offered by the Canadian Government. If you want to save money by taking advantage of first time home buyer Ontario rules, then this is an option that you’ll need to consider.
This rebate can apply to both newly constructed homes and those that have undergone significant renovations. For the rebate to apply to renovations, at least 90% of the interior of the home must have been replaced or improved.
The HST Ontario first time home buyer rebate can be applied to homes that:
- That are newly constructed
- Have been purchased from a home builder or developer.
- Have been converted from non-residential properties (such as commercial or industrial).
- Have been significantly renovated or remodeled.
Buying a new home gives you more freedom to customize. Even an older home can be renovated or remodeled to meet your needs. With this Ontario first time home buyer rebate, you can get even more value out of your purchase by getting back the HST charged on the purchase. With first time home buyer down payment in Ontario being so costly today, getting back any amount of money from a first time home buyer program in Ontario is a huge benefit.
If you’ve found the perfect home, you can talk to our brokerage team to make the mortgage process simpler and free of unnecessary stress. We’ll help you to save money with lower rates, giving you the best deal even before you apply for any Ontario first time home buyer rebates and land transfer tax refund for first time home buyers.
Insurance for First Time Home Buyers
There are numerous first time home buyer Ontario grants available to you. As you begin to explore the home market and work with your mortgage broker, it’s important to consider the most valuable programs. In addition to a first time buyer down payment, land transfer tax Ontario first time home buyer, and other available benefits, you should think about how insurance will affect the affordability of your home.
Canada is shifting towards a greener and more sustainable future. If you plan to buy, build, or renovate a new home with energy-efficient features, you may be eligible for a refund of up to 25% on your mortgage loan insurance premium.
The Green Home program is made possible by the Canada Mortgage and Housing Corporation. It creates an incentive for buyers to purchase eco-friendly homes, or update older homes that they move into.
In addition to a rebate, building or buying a greener home can come with significant long term benefits. Your home could help to protect Canada’s natural resources and wildlife. Your choice of a home could also significantly reduce your energy costs over the lifetime of ownership. This, combined with other benefits like a first time home buyer tax credit Ontario, could increase affordability.
You can work directly with your real estate agent to ensure that you choose an eligible home when buying from the new construction market.
First Time Home Buyer Renovation Loan
A first time home buyer renovation loan can be obtained privately, or you can fund renovation through the various first time home buyer programs in Ontario. The first time home buyer Ontario RRSP is an example, where you can withdraw money from your retirement savings account to fund home improvements or building activity when you purchase your first home.
Other first time home buyer benefits in Ontario can also help contribute to renovation costs. The land tax rebate is a significant one. This can provide up to $4,000 in the form of a tax refund, potentially giving you more freedom to improve your new home to your liking, or repair damage or general wear and tear.
You could also seek a first time home buyer renovation loan once you have built equity in your home. A line of credit could offer a simple way to leverage your investment and improve upon it. Renovating your home could increase its value, while also increasing your equity.
Whether you’re looking for a line of credit for a first time home buyer renovation loan, or if you simply want to move ahead with the mortgage process, our experienced brokers can help. Talk to us today to start pre-qualification so that you can make an offer on your dream home.
With the extensive first time home buyer benefits in Ontario, homeownership is possible for millions of individuals and families.
First Time Home Buyer Incentive in Ontario
One of the very best first time home buyer Ontario grants is the first time home buyer incentive in Ontario. This program is designed to stimulate the economy and make it easier for people to make a first time buyer down payment.
This first time home buyer program in Ontario allows for a grant of up to 10% to contribute to a first time buyer down payment.The program is tiered to determine how much of a first time home buyer incentive in Ontario you will receive. The benefit can be as little as 5% or as high as 10%, depending on how much you pay for the home, and how much you sell it for at resale.This first time home buyer incentive in Ontario is fairly unique compared to the other available options. It provides an upfront incentive to cover a first time buyer down payment, but that incentive needs to be paid back when the home is sold.
Although it’s labeled as a first time home buyer incentive in Ontario, there are ways to take advantage of this program if you haven’t owned a home for more than four years. Read on to learn about first time home buyer qualification in Ontario, where it concerns the Canadian federal government.
If you think that you will struggle to save for a first time home buyer down payment in Ontario, but are confident that you can make regular mortgage payments, then this first time home buyer program in Ontario could be perfect for your needs.
First Time Home Buyer Qualification in Ontario
Every first time home buyer program in Ontario offered by the federal government uses the same qualification criteria.
First time home buyer qualification in Ontario is not quite as the name implies. The federal government sees a first time buyer as someone who hasn’t owned a home at any time in the previous four years. If a grant or incentive applicant is married, their spouse must not have owned a home during the same period. After the four years, the federal government considers the individual or couple to be ‘first time’ buyers.
The only time that first time home buyer qualification in Ontario is different is when the program is administered by a municipal or provincial department. The land tax rebate is a type of first time home buyer Ontario grant, and this can only be used once in a lifetime, no matter how much time passes between homeownership.
The simple rule of thumb is that a federal first time home buyer program in Ontario will follow the four year exception, while programs offered by the smaller government bodies will often have strict restrictions on how a buyer is qualified.
First Time Home Buyer Ontario Grants Can Make Your Dream a Reality
You envision owning your own home, growing your family, and increasing your equity in the coming years. First time home buyer benefits in Ontario can make it possible.
From finding a first time home buyer renovation loan to taking advantage of your retirement savings with first time home buyer Ontario RRSP, the programs and rebates available to you are extensive. Even the costly Ontario land tax can be offset if you’re buying a home for the first time.
In addition to these financial tips, tricks, grants, and rebates, you will also need a reliable mortgage broker to help you move into your first home. A mortgage is the first step to help you explore the market and make a competitive offer.
If you’re ready to move ahead with the home buying process, talk to one of our talented mortgage experts today. We’ll find the most competitive rates so you can save even more money on your first home purchase.
Lowest Residential Mortgage Rates in Canada*
|Term||OUR RATE||TD Bank Rate|
|3 Year Fixed/ 25 yrs||5.99%||6.51%|
|3 Year Variable/ 25 yrs||6.20% Promo||6.70%|
|4 Year Fixed/25 yrs||5.54% Promo||6.29%|
|5 Year Fixed/ 25 yrs||5.54% Promo||6.14%|
|5 Year Variable/ 25 yrs||6.20% Promo||6.90%|
|5 Year Fixed/ 30 yrs||6.05% Promo||6.24%|
|5 Year Variable/30 yr||6.70%||7.05%|
|4 Year Fixed/30yr||6.34% Promo||6.39%|
|3 Year Fixed/30yr||6.24% Promo||6.61%|
|**NEW RENTAL 5 Year Fixed /30yr||6.15% Promo||6.29%|
|** NEW RENTAL 3 Year Fixed /30yr||6.34% Promo||6.66%|
Updated: Aug 23 , 2023
* Current promotion rates may provide an additional 0.05% discount or may be anytime discontinued at the Lender discretion . Rates may vary between geographic regions and the posted rates on this website may not be available in your area.TD Bank rate used for comparable are the rate listed by TD Canada Bank in the Broker Chanel Portal at the date above. Please contact our MCI office for more details and current promotions.
LOWEST REGULAR RATES IN CANADA*
* Current promotion rates may provide an additional 0.10% discount. Rates may vary between geographic regions and the posted rates on this website may not be available in your area. Please contact our MCI office for more details and current promotions.