Incentives for 1st Time Home Buyers

INCENTIVES FOR 1st TIME HOME BUYERS

Once you have decided you are financially ready to purchase your first home, you may want to check into some incentive programs to see if you qualify. Two such programs for

first time home owners are:

1. FIRST TIME HOME BUYERS’ (FTHB) TAX CREDIT

To assist first time home owners with the costs associated with the purchase of a home (legal fees, disbursements and land transfer tax), the Government of Canada introduced a

FTHB Tax Credit in 2009. Based on an amount of $5,000, the credit will provide up to $750 in federal tax relief for qualifying buyers. You must claim this credit in the year

in which you bought your home.

2. EXPANSION OF THE HOME BUYERS’ PLAN (HBP)

The HBP is a program that allows first time home buyers to withdraw funds from their RRSP’s to buy or build a qualifying home. The Government of Canada has increased the

HBP withdrawal limit to $25,000 from $20,000 per person. Note – your RRSP contributions must remain in your RRSP for at least 90 days before you can withdraw them under the

HBP. You will have to repay an amount to your RRSP each year until your HBP balance is zero and it must be paid back within 15 years. If for some reason you do not repay the

amount due for a year, it will have to be included in your income for that year.

Do you qualify?

• You (spouse and/or common law) must be a first time home buyer

• You must be a resident of Canada

• The home must be located in Canada

• You must intend to occupy the home as a principal residence no later than one year after you’ve purchased it

Canada’s Economic Action Plan introduced these 2 programs – the FTHB tax credit and the HBP to help first time home buyers afford home ownership. It may be worth

checking out? Every little bit helps.