First Time Home Buyers Relief
- First Time Home Buyers Tax Credit
- Land Transfer Tax Refund
- HST New Housing Rebate
First Time Home Buyers Tax Credit
- Government backed incentive for First Time Home Buyers
- Designed to assist with high closing costs of buying a home
- Must purchase a qualifying home with the intent to use it as primary residence
Introduced in 2009 as part as Canada’s Economic Action Plan, the first time home buyers’ (FTHB) tax credit is a government backed incentive to assist first time home buyers with the expenses involved in buying a home. The FTHB’s tax credit is based on $5,000 non-refundable income tax credit for buyers who purchase a qualifying home.
Am I Eligible?
To qualify for the FTHB tax credit you, or your spouse or common-law partner, must have acquired a qualifying home. In addition, you must not have lived in another home owned by you, or your spouse or common-law partner, in the year of purchase or in any of the four years prior.
How is it calculated?
The amount of the tax credit that FTHB’s will actually receive is calculated by multiplying the lowest personal income rate for the year by the total closing costs involved in the home purchase, to a maximum of $5,000.
What is a qualifying home?
A qualifying home is defined as a home you, or a related person with a disability, intend to occupy as a principal residence within one year after purchase. The home must be acquired after January 27th, 2009 and be located in Canada. The home can be an existing home, or newly constructed, and can be a single family home, semi-detached home, townhouse, condo, an apartment or a mobile home.
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Ontario Land Transfer Tax Refund
What is the Ontario Land Transfer Tax?
When purchasing land in Ontario you are required to pay an Ontario Land Transfer Tax. The amount you are required to pay is typically based on the amount you paid for the land, in addition to the amount remaining on financing (ex: mortgage) you assumed to buy the land. The definition of land in the case includes buildings, buildings that are planned to be constructed and fixtures. The tax is payable to the provincial government or municipal government upon closing. Click here for a land transfer tax calculator.
What is the Ontario Land Transfer Tax Refund?
To assist first time home buyers with the expense of buying a home the Ontario government has implemented an Ontario Land Transfer Tax Refund. Qualified first time home buyers may be entitled to up to a maximum refund of $2,000 on the land transfer tax. There is also a first time buyer’s refund for homes purchased in the City of Toronto. Applications for the tax refund are typically handled by your lawyer at the time of closing.
Who qualifies?
To qualify for the for the tax refund you must be at least 18 years of age and be a first time home buyer. In this case, you qualify as a first time home buyer if you, or your spouse, have not owned a home, or an interest in a home, anywhere in the world. Furthermore, you must occupy the home as your primary place of residence no later than 9 months after the date of purchase.
HST New Housing Rebate
With the introduction of a Harmonized Sales Tax (HST) the Ontario government has also introduced a new housing rebate. The rebate would cover 75% of the provincial component of the HST paid on the purchase price, or construction costs, of mostly newly constructed or substantially renovated homes, for a maximum rebate of $24,000.
Who qualifies?
To qualify for the rebate the new housing purchase can only have a purchase price of up $450,000 and must used as a primary residence. Owner-built home with qualifying construction expenses that total over $450,000 qualify for the maximum rebate of $24,000. For a list of all qualifying homes see below:
- Building a home or contracting someone to build one
- Buying a newly constructed, or substantially renovated home, from a builder
- Buying a newly constructed house from a builder, where you lease the land from the builder under the same agreement to buy the house
- Substantially renovating a home or building a major addition to one
- Rebuilding a home destroyed by fire
- Buying a share of the capital stock in a newly constructed cooperative housing project
For more detailed information download Canada's Revenue Agency HST New Housing Rebate Info Sheet.
Click here for the GST/HST New Housing Rebate Application Form.
You can also talk to your Homeguard Agent, lawyer, or real estate agent for more information about the HST New Housing Rebate.
