Buyer Incentives & Rebates

Buyer Incentives & Programs

When purchasing a property, it's important to explore various buyer incentives and programs that may be available to you. These incentives can significantly ease the financial burden, especially for first-time buyers. However, before moving forward with any purchase, it is highly recommended that you consult with professionals such as your lawyer, mortgage specialist, financial advisor, and accountant. This ensures you fully understand any tax or legal implications associated with buying a property and can help you take advantage of the right incentives.

Common Buyer Incentives & Programs:

• First-Time Home Buyer Incentive: A government program designed to reduce the monthly mortgage payments for first-time buyers by offering an interest-free shared equity mortgage.

• Home Buyers' Plan (HBP): This allows first-time home buyers to withdraw up to $35,000 from their RRSPs to put towards the purchase of a home.

• Land Transfer Tax Rebate: In Ontario, first-time homebuyers can apply for a rebate on their land transfer tax, reducing upfront costs.

• GST/HST New Housing Rebate: For buyers of new homes or those undergoing substantial renovations, this rebate offers savings on the GST or HST portion of the cost.

Possible Tax Implications

Certain property purchases may come with specific tax implications. It’s critical to be aware of how these might impact your overall financial picture. Some common situations to consider include:

• Capital Gains Tax: If you are buying an investment property or second home, any future sale of the property may be subject to capital gains tax. This tax is applied to the profit made from selling a property that is not your principal residence.

• Non-Resident Buyer Tax: In Ontario, foreign buyers may be subject to the Non-Resident Speculation Tax (NRST), which adds an additional 25% tax on the purchase of residential property in certain areas.

• Principal Residence Exemption: When you sell your primary residence, you may be exempt from paying capital gains tax. However, if you’ve used the property for rental income or business purposes, this exemption may not fully apply.

• GST/HST on New Builds: For newly built homes, there may be GST or HST applied to the purchase price. However, rebates such as the GST/HST New Housing Rebate may help reduce this cost.

Why You Should Consult with Professionals

Each program and incentive comes with its own set of eligibility criteria, tax implications, and legal considerations. Before making any decisions, consulting with your lawyer, mortgage specialist, financial advisor, and accountant will help you:

• Understand the long-term financial impact of your purchase.

• Ensure you are making use of the best available programs and incentives.

• Comprehend any tax implications and how they may affect your financial situation.

By being well-informed and leveraging these available incentives, you can make the most of your home-buying experience.