Buying your first home is a significant milestone! While you’re thinking about your affordability and what type of home you want to own, we have some exciting updates around first-time homebuyer benefits:
New or Pre-Construction Homes: Did you know? First-time buyers looking to purchase a new build or pre-construction home are eligible for 30-year amortization. This mortgage commitment can allow you to have smaller monthly payments, versus a standard 25-year amortization.
Mortgage Default Insurance: The CMHC has recently made it so mortgage default insurance will cover up to $1.5 million homes (increased from $1 million), helping more Canadians qualify for insured mortgages.
The Home Buyers’ Plan (HBP): The Canadian government has a program known as the Home Buyers’ Plan (HBP), which is designed to allow first-time homeowners to withdraw up to $60,000 from RRSP to buy a home!
Purchasing with your spouse? You can access a total of $120,000 from your RRSP’s.
First Home Savings Account (FHSA): The First Home Savings Account (FHSA) is specifically designed to help first-time homebuyers save for their down payment without paying taxes on the interest earned on their savings. The maximum is $8,000 annually that you can add into this account to save, with a maximum of $40,000 lifetime contributions.
First-Time Buyer Exemption: First-time home buyers are eligible for an exemption, reducing the property transfer tax you pay. If the fair market value of the property is:
- $500,000 or less, you can claim an exemption amount equal to the full amount of property transfer tax.
- Over $500,000 but no more than $835,000, the exemption amount is $8,000.
- Over $835,000 and under $860,000 then the exemption amount is proportionally reduced up to $15,200.
Land Transfer Tax Rebates: First-time buyers in Ontario, British Columbia, Prince Edward Island, and the City of Toronto are able to claim land transfer tax rebates.
No matter your plans or situation, please don’t hesitate to reach out to us!
Source: DLC