Archives for August 2012

1st Time Home Buyers Rebates

Home Buyers Plan – up to $25,000

If you currently have a registered retirement savings plan (RRSPs) you can withdraw funds from your plan to buy or build a home for yourself or for a related person with a disability.  For the home to qualify it must be located in Canada.  Single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, and apartments in duplexes, triplexes, fourplexes, or apartment buildings – both resale and those newly constructed  all qualify. A share in a co-operative housing corporation that entitles you to possess, and gives you an equity interest in a housing unit located in Canada, also qualifies. However, a share that only provides you with a right to tenancy in the housing unit does not qualify.

You can withdrawl funds from more than one RRSP as long as you are listed as the owner of each RRSP and the fund is not locked in or a group RRSP. Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the Home Buyers Plan, or they may not be deductible for any year. Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years. You will have to repay an amount to your RRSPs each year until your HBP balance is zero. If you do not repay the amount due for a year, it will have to be included in your income for that year.

To qualify you need to be a first time homebuyer and a resident of Canada. If you or your spouse or common-law partner have previously owned a home, you may still be considered a first-time home buyer.  Also if you are building or buying a home for a person with a disability you may not have to meet this condition. To take advantage of the 1st Time Home Buyers Plan you need to enter into a written agreement to build or buy a qualifying home. Simply obtaining a pre-approved mortgage does not satisfy this condition. You also need to occupy the home within a year of building or buying, and it must be considered your principal place of residence.

The Home Buyers Plan allows you to withdraw up to $25,000 from your RRSP in a calendar year. To learn more visit http://www.cra-arc.gc.ca/tx/ndvdls/tpcs/rrsp-reer/hbp-rap/menu-eng.html

 

First-time Home Buyers Land Transfer Tax Refund – up to $2000

Land Transfer Tax is a tax applied to all transfers of land in the Province of Ontario. It may either be claimed at the time of registration – in which case your eligible amount is deducted from your tax payment or you can claim it later in which case you receive the refund directly from the Ministry of Finance.

All applications for a refund must be made within 18 months after the date of transfer. To qualify you need to be a 1st time homebuyer (your spouse also cannot of owned a home while being your spouse.) you must be at least 18 years of age and you must occupy the home as your principal place of residence within 9 months of the date of transfer.

If purchasing a newly built home where the Agreement of Purchase and Sale was entered in prior to December 14 2007 you need to be entitled to a Tarion New Home Warranty. The refund can be processed by your lawyers office, be sure to advise your lawyer prior to the closing date if you qualify for the rebate.  You may also receive the rebate  by completing the “Ontario Land Transfer Tax Refund Affidavit For First-time Purchasers of Eligible Homes

Rebate Examples
Cost Of Home
Tax Payable
Tax Rebate
$100,000
$725
$725
$200,000
$1,725
$1,725
$300,000
$2,975
$2,000