Taking Advantage of the First-Time Home Buyers’ Tax Credit
First-Time Home Buyers’ Tax Credit
Introduced as part of Canada’s Economic Action Plan to assist Canadians in purchasing their first home, the first-time home buyers’ tax credit is designed to help recover closing costs by providing, at current taxation rates, a rebate of approximately $750 for first-time buyers.
There are a few limitations on this tax credit. It must be claimed within the year you purchased your time, it cannot exceed $750 even if you purchased with a co-applicant, and the home must be a “qualified home.”
RRSP First-Time Home Buyers’ Plan
The Canadian Government (HBP) Home Buyers’ Plan allows first time home buyers to borrow up to $25,000 from their RRSP, tax free, for a down payment. An HBP must be repaid within 15 years, with the first payment due 24 months of withdrawing the funds, but it applies to co-applicants as well, allowing up to $50,000 toward a down payment.
Ontario First-Time Home Buyers’ Land Transfer Tax Rebate
Available to first time home buyers, this rebate is worth a maximum of $4,000 towards Ontario’s Land transfer tax based on current tax rates, and it covers the full tax on homes valued at $227,500.
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