3 Programs for Ontario First Time Home Buyers

Published: 15th February 2010
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The time has never been better to be a first time home buyer in Ontario. With evidence lower rates of interest, steady home prices and an array of great plans created specially for first time home buyers.

The 3 main programs available for first time home buyers are the First Time Home Buyer RRSP Plan, the Ontario Land Transfer Tax Credit and the Toronto Land Transfer Tax Credit. Both the RRSP home buyers plan and the Ontario land transfer tax credit are obtainable province wide. The Toronto land transfer tax credit is only available to first time home buyers purchasing in Toronto. No other places in Ontario at this time posses their private municipal land transfer tax.

Here is a summary of the programs:
First Time Home Buyer RRSP Plan (HBP) - This program enables a first time home buyer to take out up to $25,000 from their RRSPs to purchase or construct a house. The withdrawn amount must be repaid within 15 years and is subject to a minimum annual repayment of 1/15 of the amount withdrawn. If the entire $25,000 is removes, the minimum annual reimbursement 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 great program for people who have RRSP's ready but don't possess sufficient 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 apply the entire maximum amount or a part of the maximum reimburse amount. Thus, the first time home buyer is able to purchase a home of worth $227,500 where he is exempted from paying any land transfer fees. Any amount higher than $227,500 is taxed a rate of nearly 1.5%. To qualify the property must 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 sum is also greater 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 additional amount more than $400,000 will be taxed at a interest rate of 2%. To be eligible for this program, you need to check the property has to be occupied by the owner of the home.



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.


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