//MORTGAGE ADVICE
What if your co-purchaser doesn’t qualify as first-time homebuyer? » by ALYSSA RICHARD
ALYSSA RICHARD
is the Founder and CEO of ratehub.ca, a mortgage rate comparison site that aims to empower Canadians to make smart financial decisions.
If you’re a first-tome homebuyer, you should be aware that there are credit and rebate programs available to you. Depending on where you live, there may be both federal and provincial programs that can help you enter the market and put money back in your pocket. Here’s a look at the programs you may be eligible for, and how they change if you and your co-purchaser don’t both qualify as first-time homebuyers. Federal programs The first program is the First-Time Home Buyers’ Plan (HBP), which allows eligible Canadians to withdraw up to $25,000 from their RRSP tax-free for a down payment. If only one of you is a first-time homebuyer, you can still withdraw this amount, so long as you have not lived in a home owned by the other buyer within the past four years. If both qualify as first-time homebuyers, you can withdraw a combined $50,000. There is also the First-Time Home Buyers’ Tax Credit (HBTC). So long as you can show $5,000 in eligible expenditures (including your land transfer tax), you will receive a $750 rebate with your next income tax return. In order to qualify, however, neither you nor your co-purchaser can have lived in a home that one of you owned in the past four years. Provincial programs In Ontario, qualified buyers may be eligible for the Ontario Land Transfer Tax Refund for First-Time Homebuyers, up to a maximum of $2,000. If one of you has owned a home before, the other can still claim half ($1,000).
46 NEW HOME GUIDE GTA | MAR 22 - APR 5, 2014
In Toronto, qualified first-time buyers are also eligible for a rebate of the Toronto Land Transfer Tax, up to a maximum of $3,725. Again, if one of you has owned a home before, the other can still claim half of this refund ($1,862.50). Elsewhere in the country, both purchasers have to be first-time homebuyers in order to qualify for any provincial programs. Homebuyers in British Columbia and Prince Edward Island can face a hefty property transfer tax. Unfortunately, neither you nor your co-purchaser can claim a rebate of it, if one of you is not a qualified first-time homebuyer. In Saskatchewan, the First-Time Homebuyers’ Tax Credit provides a tax credit of up to $1,100 to first-time homebuyers, so long as neither you nor your co-purchaser have owned and lived in another home in the past four years. Finally, the Nova Scotia First-Time Home Buyers Rebate helps buyers get back 18.75 per cent – to a maximum of $3,000 – of the provincial portion of the HST on new homes. To claim the rebate, neither of you can have owned a home in Canada in the last five years.