Articles

2009-04-01 - First Time Home Buyers Government Incentives

Canada's Government introduces financial help for first-time home buyers

Ottawa, Ontario, February 2, 2009... The Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister John Baird, Canada's Minister of Infrastructure, Transportation and Communities and Member of Parliament for Ottawa West - Nepean, highlighted key initiatives from Budget 2009:  Canada's Economic Action Plan that will benefit first-time home buyers.

Canada's Economic Action Plan supports the Canadian home construction and real estate industries, with a First-Time Home Buyers' tax credit that will provide up to $750 in tax relief to first-time home buyers; and an increase in the amount that they can withdraw from an RRSP to purchase a home from $20,000 to $25,000.

 “Buying a home for the first time is a milestone event for many Canadians and is often the single largest purchase that one can make,” said Minister Blackburn. “The proposals announced in Canada's Economic Action Plan will not just help first home buyers in the purchase of their first home.  It will also help stimulate the housing sector through increase in demand for labour, building materials and other goods.”

“Young families and others looking to buy a home for the first time deserve a break, and our government has delivered,” said Minister Baird.  “When people are buying homes, tradespeople are being put to work, businesses that make and sell building products get a boost, and the real estate industry continues to employ people too.”

“The federal government has found a way to introduce economic stimulus and housing initiatives for specific groups, and for Canadians who want to buy their first home,” said Calvin Lindberg, President of the Canadian Real Estate Association (CREA).

"This is great news for first-time homebuyers who comprise a sizable portion of our customer base. And with the new home market experiencing a slowdown in recent months,” said Robert Greenberg, Executive Vice President of Minto Developments Inc. “These types of incentives are certainly welcomed by the housing industry. When you think of how many components go into the building of a new home, a strong housing market is good for the overall economy, not just for builders."

More information on these and other measures in Canada's Economic Action Plan, a plan to stimulate the economy and protect those hit hardest by the global recession, can be found at http://www.budget.gc.ca/2009/home-accueil-eng.asp.

 Home Buyers' Plan

The Home Buyers' Plan allows eligible individuals to withdraw up to $20,000 tax free from their Registered Retirement Savings Plan (RRSP) to purchase or build a qualifying home.

Delivered by: Canada Revenue Agency (CRA)

Eligibility Information

The Canada Revenue Agency considers the following persons first-time home buyers:

• persons, including former homeowners, who have not owned a home they occupied as a principal place of residence at any time during the four-year period before the date of withdrawal of funds
• disabled persons acquiring a more accessible home
• persons acquiring a more accessible home for a disabled person related to them by blood, marriage, common-law partnership or adoption
• persons providing funds to a disabled person related to them by blood, marriage, common-law partnership or adoption, to build or purchase a more accessible home
• other criteria may apply

Dates and Deadlines

• Participants must begin repayment two years after withdrawing the funds.
• Amounts withdrawn under the Plan must be repaid over a period of no more than 15 years.

Contact Information

• Contact the Canada Revenue Agency.

 Land Tansfer Tax Rebate

ONTARIO LAND TRANSFER TAX

The provincial government has announced that it is expanding the PROVINCIAL land transfer tax rebate for first-time buyers to include re-sale housing, something which REALTORS® have lobbied for.

Details

• First-time buyers of BOTH re-sale, and newly constructed homes, will be eligible for a rebate of the provincial land transfer tax of up to $2,000.
• Effective for first-time buyers who enter into Agreements of Purchase and Sale AFTER December 13, 2007.
• This change is being implemented by provincial legislation introduced on December 13, 2007. The Ministry of Finance has indicated that, until the legislation is passed, first-time buyers of re-sale properties eligible for the rebate can submit their applications for the refund and they will be processed once the legislation has passed. It is not known when the legislation will be passed. Buyers can consult with their lawyers if they have concerns.
• The provincial land transfer tax rebate applies in all Ontario municipalities.

Further information is available by calling:

Ministry of Finance
Land Transfer Tax Section
905-433-6361