Home Ownership Incentives
"Government Programs to help you save"
Home Buyers' Plan (HBP)
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 owed a home which you occupied as your principal residence in the last five years.
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 withdraws. For example, in October 2003 you withdraw $15,000 from your RRSP to finance the purchase of your home. Your first annual repayment of $1,000 ($15,000 divided by 15 years) is due December 31, 2005.
For more information go to the Canadian Customs and Revenue Agency web site at www.ccra-adrc.gc.ca and search for 'Home Buyers Plan'
CMHC's Five Per Cent Down
With as little as five per cent down, 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. This helps make home ownership a reality for many Canadians who can afford monthly mortgage payments but would have trouble saving for a larger down payment. The program is open to both new and repeat home buyers who buy a home in Canada and occupy it as a principle residence. Maximum house prices apply to loans greater then 90 per cent of the 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.
Comparable mortgage insurance may also be offered through other financial services providers.
For more information, go to CMHC's web site at www.cmhc-schl.gc.ca and search for 'Mortgage Loan Insurance'.
Help the Planet, Help Your Wallet
CMHC has added environmentally friendly features to the Mortgage Loan Insurance it offers. If you use CMHC insured financing to buy an energy-efficient home, purchase a house and make energy-saving renovations or renovate your existing home to make it more energy-efficient, a 10% refund on the Mortgage Loan Insurance premium may be available. You could also have the added flexibility of a longer amortization (the period of time required to repay your mortgage) from 25 years to a maximum of 40 years, significantly reducing your monthly payments.
The Government of Canada actively promotes energy conservation and initiatives to reduce greenhouse gas emissions that contribute to climate change.
How It Works
Obtaining an energy assessment through an NRCan qualified energy advisor.
NRCan has developed an energy assessment and labelling system to help homeowners make energy-saving choices when buying a home or renovating. For a fee, a NRCan qualified energy advisor will evaluate the house to determine its energy efficiency rating on a scale of 0 100.
For more information, including information on the Government of Canadas ecoEnergy initiatives, visit http://oee.nrcan.gc.ca
Land Transfer Tax (LTT) Rebate
First-time buyers of new and re-sale homes are eligible to receive rebates of the provincial and Toronto land transfer taxes. The maximum provincial land transfer tax (LTT) rebate for first-time buyers is $2,000 and the maximum Toronto LTT rebate for first time buyers is $3,725.
To be eligible as a first-time buyer for the provincial LTT rebate and/or Toronto LTT rebate,
- The purchaser must be at least 18 years of age.
- The purchaser must occupy the home as his or her principal residence no later than nine months after the date of the conveyance or disposition.
- The purchaser cannot have previously owned a home, or had any ownership interest in a home, anywhere in the world, at any time.
- If the purchaser has a spouse, the spouse cannot have owned a home, or had any ownership interest in a home, anywhere in the world while he or she was the purchaser’s spouse. If this is the case, NO refund is available to either spouse. Note: If a purchaser’s spouse owned an interest in a home BEFORE becoming the purchaser’s spouse, but not while the purchaser’s spouse, the purchaser may be eligible for some rebate.
For more information, contact the Ontario Ministry of Finance at 1-800-263-7965.