Buying your first home can be overwhelming. Luckily, buying in Ottawa means you get to take advantage of a variety of first-time home buyer incentives offered by the federal and Ontario provincial governments.
So which first-time home buyer incentives are you eligible for?
Most first-time home buyers in Ottawa will be eligible for some mixture of the following:
Ontario Land Transfer Tax Refund
First-Time Home Buyers’ Tax Credit
New Housing Rebate
Canadian Home Buyers’ Plan
Ontario Land Transfer Tax Refund
Typically, your land transfer tax is due immediately after closing on a new home. This applies whether it’s your first time or 21st time purchasing a house.
Normally, this amount is up to 1.5% of your home's purchase price, which equates to ~$5,250 for a new home purchased at $350,000.
As a first-time home buyer in Ottawa, the government offers an immediate refund once you register. This refund can be a full or partial refund depending on your specific circumstances, but most homes under $368,000 receive a full refund.
First-Time Home Buyers’ Tax Credit
The First-Time Home Buyers’ Tax Credit is designed to get a small portion of your down payment back to you.
When you file your tax return the year after purchasing, this tax credit typically offers a $5,000 non-refundable amount, which translates to roughly $750 back to you for home expenses.
New Housing Rebate
Buying a new build? Unlike buying from a previous owner, buying a new build means paying GST/HST on the new home.
With the GST/HST new housing rebate, you may be eligible for a tax rebate on a portion of the GST or HST you paid as part of the purchase or construction of a new home.
With this rebate, most new homes valued under $400,000 upon completion are eligible for a rebate. The rebate is often 75% of the designated GST/HST.
Canadian Home Buyers’ Plan
The Home Buyers' Plan (HBP) allows you to take out money from your RRSP early with no consequences. (Read: you still have to pay it back though!)
Any money contributed to your Registered Retirement Savings Plan (RRSP) is considered sheltered from taxes until you withdraw it later upon retirement.
As a first-time home buyer, you can withdraw up to $35,000 to put towards your new home. Buying with a partner? You can BOTH withdraw up to $35,000 each, allowing for a total tap out of $70,000.
Not bad for a little help!
Want more details on these first-time home buyer incentives for Ottawa? Click the photo below to download your copy of the First-Time Home Buyers’ Incentives Guide. If you still have questions, shoot me a message at 613-790-7679 and I’d be happy to help you find the right answers!
Disclaimer: I am not a mortgage specialist and the above should only be taken as loose advice. Please contact a mortgage specialist or bank for formal advice.