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4 Government Benefits for a Home Buyer in Canada, 2020

2020-08-24 Dan D. Kimreal estate

Buying a home in Canada? Make sure you check these 4 benefits!

Home Buyers’ Amount

Home Buyers’ Amount allows you to claim $5,000 in tax credits, which works out to be $750 in federal tax cuts for eligible individuals.

Requirements

Home Buyers’ Plan (HBP)

Home Buyers’ Plan allows you to withdraw up to $35,000 from your registerd retirment savings account (RRSP) towards a purchase of a home.

Benefit

Taxes are a bitch in this country, and this allows you to take your money out tax-free towards a home. What a deal.

The Catch

You need to “repay” the amount you took out from your RRSP back into your RRSP account within 15 years. More info here.

Requirements

  • you are a first-time home buyer, and
  • you must have a written agreement to buy or build a qualifying home for yourself, and
  • you must be a resident of Canada, and
  • You must intend to occupy the qualifying home as your principal place of residence within one year after buying or building it

GST/HST New Housing Rebate

GST/HST New Housing Rebate gets you tax credits on purchases made towards new housing or substantially renovated dwellings.

Benefits

Free money. The amount depends on the province you are in.

Requirements

  • you purchased a new housing unit for use as your primary place of residence, or
  • you purchased shares in a co-operative housing complex for using a unit as your primary place of residence, or
  • you built your own home or hired someone to build your home, which you plan to use as your primary place of residence. The completed house must be valued less than $450,000.

First Time Home Buyer Incentive

First Time Home Buyer Incentive was introduced in September 2019, because the Canadian government wanted to help some poor blokes afford a home.

Benefits

The government will put down 5% or 10% towards the purchase of a home, depending on whether it’s a resale or a new construction. It helps if you are strapped for cash.

The Catch

The government will end up owning the amount they put down. If they put down 5% towards the purcahse price your home, then they own 5% of your home. When you sell your home, 5% of the sale price will go back to the government.

You must pay back the government’s share within 25 years, or when the property is sold.

Requirements

  • you are a first-time home buyer
  • you have a household income of less than $120,000
  • the mortage is capped at four times your househould income, or $480,000 max

Reference.

That’s all.

Happy investing :)