Buy: First Time Home Buyers
Buying your first home can be an intimidating and overwhelming experience, but with the right Realtor it can be a much smoother process. A good Realtor will have the knowledge and expertise to guide you through the process, from finding the perfect property to negotiating a fair price. They can also help you navigate the paperwork and legalities associated with buying a home. With our help, you can find your dream home without any of the stress that usually comes with purchasing real estate.
We are with you every step of the way, our dedication and service to you does not stop after you buy. We love to keep in-touch and we hope to retain a lifelong friendship with our clients, always there for any questions that come up over the years ahead, as your family’s trusted real estate resource. We also thoroughly enjoy catching up with our clients at our yearly client appreciation events! Some of our client-exclusive yearly events include our VIP Rib fest tent, our private Oktoberfest party and Chestnut Park Christmas party including pictures with Santa and tree/wreath distribution.
Here are five questions you can ask during a consultation meeting:
You will want to know what type of clientele they are used to working with and if they can provide adequate support.
Is it their connections in the city, communication skills, or ability to find the best homes? The answer should tell you their specialties that could help you get your dream home.
Realtors can guide you through the homebuying process, but others can also share information on local schools, the overall community, and social events.
The homebuying process requires tons of steps to be completed from all ends, so you’ll want to be involved in each decision.
When you hire us, you hire FULL-TIME agents! We are available 7 days a week, to view properties or assist you anyway we can, at a time that is convenient for you!
Why use a REALTOR
It makes sense to hire a REALTOR when looking for your first home. There is no direct cost to the buyer, so it makes sense to have your interests professionally represented in your purchase just as the seller already has professional representation. We will help you understand market conditions, local neighborhoods, new properties that hit the market and negotiate the best price on your first home.
First Time Home Buyer Incentives
The Government of Canada has four programs to assist first-time home buyers:
A registered savings account that helps first-time home buyers save for a down payment.
- Contribute up to $8,000 per year, with a lifetime maximum of $40,000.
- Contributions are tax-deductible.
- Withdrawals are tax-free when used to purchase a qualifying first home.
- You haven’t owned a qualifying home in the current year or any of the previous four calendar years.
- You have a written agreement to buy or build a qualifying home before October 1 of the year following the withdrawal.
- The home must become your principal place of residence within one year of purchase or completion.
- Form RC725 must be submitted to make a qualifying withdrawal.
- Bonus: Both you and your partner can each use your own FHSA toward the same home.
A non-refundable tax credit to help first-time buyers with closing costs like legal fees, inspections, and land transfer taxes.
- Claim $10,000 on your tax return.
- Provides up to $1,500 in federal tax relief if you have taxes owing.
- You or your spouse/common-law partner must be a first-time home buyer (haven’t lived in a home you owned in the past 4 years).
- The home must be your principal residence within one year of purchase.
A federal program that allows you to withdraw from your RRSP to buy or build your first home without immediate tax consequences.
- Withdraw up to $60,000 from your RRSP (or $120,000 combined if both partners qualify).
- You have 15 years to repay the amount into your RRSP, starting the second year after withdrawal.
- Repayments are not tax-deductible, but any unpaid amounts are added to your taxable income.
- RRSP funds must have been in your account for at least 90 days before the withdrawal.
- You need a written agreement to buy or build a qualifying home.
- The home must become your principal place of residence.
A rebate of all or part of the Ontario Land Transfer Tax (LTT) for eligible first-time buyers. If purchasing in Toronto, you may also qualify for a Toronto Municipal Land Transfer Tax rebate.
- Up to $4,000 off the Ontario LTT.
- Up to $4,475 off the Toronto LTT (if applicable).
- Rebate is applied at the time of closing.
- You must be at least 18 years old.
- You must be a first-time home buyer (never owned a home anywhere in the world).
- The home must be your principal residence within 9 months of closing.
- If you have a spouse, they must also never have owned a home while being your spouse.
Who is considered a First-Time Home Buyer?
You are considered a first-time home buyer if:
- In the four year period (the four years prior to a home purchase), you did not occupy a home that you owned, or one that your current spouse or common-law partner owned.
- In the case of the Home Buyers’ Plan, the four year period begins on January 1 of the fourth year before the year you withdraw funds from your RRSP, and ends 31 days before the date you withdraw the funds. For example, if you are withdrawing the funds on July 31, 2022, the period is from January 1, 2018 to June 30, 2022.
Exceptions
- If you are a person with a disability or you are helping a related person with a disability to buy or build a home, qualifying as a first-time home buyer may not be required.
- If you have recently experienced the breakdown of a marriage or common-law partnership, you, generally will not be prevented from participating in the program even if you do not meet the first-time home buyer requirements, provided that you live separate and apart from your spouse or common-law partner for a period of at least 90 days as a result of a breakdown in your marriage or common-law partnership.
Mortgage loan insurance
In Canada, home buyers must purchase mortgage loan insurance, also known as mortgage default insurance, when the down payment on their new home is between 5% (the minimum amount it can be) and 20% of the purchase price.
Available from the Canada Mortgage and Housing Corporation (CMHC), mortgage loan insurance helps protect the lender against mortgage default, and enables consumers to purchase homes with a minimum down payment of:
- 5% for homes costing less than $500,000
- 10% on the portion of any mortgage it insures $500,000 and over
For example, to buy a home for $750,000, the home buyer would need a minimum down payment of $50,000, which is the total of 5% of $500,000 ($25,000), plus 10% of the remaining $250,000 ($25,000). Homes purchased for more than $1.5 million do not qualify for mortgage loan insurance, as a 20% down payment is required to buy these homes.
To obtain mortgage loan insurance, lenders pay an insurance premium, the cost of which is normally passed on to the home buyer. The premium payable is based on a percentage of the home’s purchase price that is financed by a mortgage. The premium can be paid in a single lump-sum or it can be added to the mortgage and included in the monthly payments. For more information about mortgage loan insurance, refer to topic #409 Mortgage loan insurance.