Being a first time home buyer can be very scary. We have worked with hundreds of first time home buyers and understand this very well. We have designed a Buyer’s Information Guide to help first time home buyers feel confident by understanding what to expect. We will never pressure a purchaser and understand that sometimes it can take someone a long time to find the right place. We know when to guide someone and when to listen.
There are many one time incentives for first time home buyers:
First Time Home Buyers Tax Credit
This federal non-refundable income tax credit is for qualifying buyers of detached, attached, apartment condominiums, mobile homes or shares in a cooperative housing corporation. The calculation: multiply the lowest personal income tax rate for the year (15% in 2017) x $5,000. For the 2018 tax year, the maximum credit is $750
BC Property transfer Tax (PTT) First-Time Home Buyers’ Program
Qualifying first-time home buyers may be exempt from paying the PTT of 1% on the first $200,000 and 2% on the remainder of the purchase price of a home priced up to $500,000. There is a proportional exemption for homes priced between $500,000 and $525,000. At $525,000 and above the rebate is nil.
Using RRSP Savings for Down Payments Canada Revenue Agency’s Home Buyers Plan
Qualifying home buyers can use up to $25,000 of their Registered Retirement Savings Plan to buy a home. The home must be a principal residence, the home buyers must not have owned a home within the past five years and the loan must be repaid with 15 years. Home buyers who have already used the plan and have fully repaid their RRSP may be eligible to use the plan a second time. Talk to your lender for more information.
Financial Advantages of Homeownership
Home ownership is the single largest source of savings for Canadian households. Your payments build equity (as opposed to renting, where your money goes to the building owner). Unlike other investments that can be volatile, when you buy a home the increase in its value is relatively steady.
The return on investment for a house can be substantial. In 2017, the average condo price in Vancouver rose by 25% in just one year. It also experienced a 67% increase over four years. Homeowners can use the equity in their homes as security for other loans. Buying a home and building equity is the first step on the property ladder. It gets you into the housing market, keeps you in the market with the rising house prices, and puts you in a good position to trade up to bigger and better homes as your circumstances allow.
When you own, you have the freedom to renovate and decorate as you please. Family and community. Homes can strengthen ties to your family and members of your community. More than basic shelter, homes can be a legacy passed on from one generation to the next. The Owning Advantage and some added Incentive Two out of three Canadian families own a house – that’s one of the highest rates of home ownership in the world. And for good reason. Real estate is a great investment. And with increasing housing prices, it’s all the more important for first-time buyers to get a foot on the first rung of the property ladder.