Home Buyers’ Incentives to take advantage of in 2023.

As home prices climb, so too does the cost of a down payment. This represents a major barrier for many looking to own a home—especially young people. Home buyers in Ontario, may take advantage of several incentives, including the Home Buyers’ Plan (HBP), the First-Time Home Buyers’ Tax Credit (HBTC), and various land transfer tax rebates.

The newest Incentive introduced in 2023 is the Tax-Free First Home Savings Account that would give prospective first-time home buyers the ability to save up to $40,000. Like an RRSP, contributions would be tax-deductible, and withdrawals to purchase a first home—including investment income— would be non-taxable, like a TFSA. Tax-free in, tax-free out.

The Home Buyers’ Plan (HBP) is a federal program that allows first-time home buyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to put towards the purchase of a new home. In order to be eligible, first-time home buyers must not have owned another home within the previous five years.

The First-Time Home Buyers’ Tax Credit (HBTC) is a federal non-refundable tax credit of up to $1500 for first-time home buyers who qualify for the HBP. To qualify for HBP, the purchaser must be a first-time home buyer and must have an approved written agreement to buy or build a qualifying home before October 1, 2020

In addition to these two federal programs, many provinces, including Ontario, offer land transfer tax rebates for first-time home buyers. In Ontario, first-time home buyers are eligible for a rebate of up to $4,000 on the provincial portion of their land transfer tax.

There is also Multigenerational Home Renovation Tax Credit incentive for home owner who wish to build a secondary suite for multigenerational living. Families are able to claim 15% of up to $50,000 (up to a maximum of $7,500) in tax credit for such renovations and construction.

Whether you want to buy your first home or refinance for renovation, Farley Mortgage will be happy to learn more about your situation and help you find the best mortgage for you.

Contact us today to get preapproved!