HOME BUYERS' PLAN

The Government of Canada's Home Buyers' Plan allows qualified buyers to withdraw a maximum of $25,000 from their RRSPs to purchase or build a house.  If your spouse is also eligible, you can each withdraw up to $25,000 towards the down payment, for a total of $50,000.  No income tax is deducted from these funds, as long as they are repaid to the RRSP according to the government's repayment schedule.

 

How the Plan Works

 

You may participate in the plan if you (or your spouse) have not owned a home which you occupied as your principal residence in the last five years.

 

Repayment Schedule

 

The money you withdraw from your RRSP must be repaid over a period of no more than 15 years to retain its tax deferred status.  Your repayment period starts the second year you made your withdrawals. 

 

For more information go to the Canadian Customs and Revenue Agency web site at:

http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

 

CMHC's Five Per Cent (5%) Down payment

 

With as little as five per cent (5%) down payment, all home owners now have access to the Canada Mortgage and Housing Corporation's (CMHC) mortgage insurance. This means CMHC may insure the mortgage on your home (against default in payments) for up to 95 per cent of the lending value of the home. The mortgage insurance premium is based on a sliding scale. The premiums can be added to the mortgage paid on a monthly basis.

 

For more information, go to CMHC's web site at:

http://www.cmhc-schl.gc.ca and search for 'Mortgage Loan Insurance'.

 

Land Transfer Tax (LTT) Rebate

 

First-time buyers of newly constructed homes may receive a refund of provincial portion of land transfer tax up to a maximum of $2,000. Only individuals who are at least 18 years of age, have not owned an interest in a home anywhere in the world and whose spouse has not owned an interest in a home anywhere in the world, qualify as first time buyers. The first-time buyer must be buying a newly constructed home or an interest in a newly constructed home.

 

To get detailed information on the provincial government’s Land Transfer Tax Rebate, please visit at:

http://www.rev.gov.on.ca/en/refund/newhome/index.html

 

 

 

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