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What To Expect From A Realtor       Home Ownership Incentives

The Government of Canada's Home Buyers' Plan allows qualified buyers to withdraw a maximum of $ 20,000. from their RRSPs to purchase or build a house. If your spouse is also eligible, you can each withdraw up to $ 20,000. towards the down payment, for a total of $ 40,000. No income tax is deducted from these funds, as long as they are repaid to the RRSP according to the Government's repayment schedule.

How the Plan Works

You may participate in the plan if you (or your spouse) have not owned a home which you occupied as your principal residence in the last five years.

Repayment Schedule

The money you withdraw from the RRSP must be repaid over a period of no more than 15 years to retain its tax deferred status. Your repayment period starts the second year following the year you made your withdrawals. For example, in October 2002 you withdraw $ 15,000. from your RRSP to finance the purchase of your home. Your first annual repayment of $ 1,000. ($15,000. divided by 15 years) is due by December 21, 2004.

CMHC's Five per Cent Down

With as little as five per cent down, all home owners now have access to the Canada Mortgage abd Housung Corporation's (CMHC) mortgage insurance. This means CMHC may insure the mortgage on your home (against default in payments) for up to 95% of the lending value of the home. This helps make home ownership a reality for many Canadians who can afford monthly mortgage payments but would have trouble saving for a large down payment. The program is open to both new and repeat home buyers who buy a home in Canada and occupy it as a principal residence. Maximum house prices apply to loans greater than 90% of the value of the home.

The mortgage insurance premium is based on a siding scale. The premiums can ne added to the mortgage paid on a monthly basis.

Comparable mortgage insurance mat also be offered through other financial services providers.

Ontario Home Ownership Savings Plan (OHOSP)
By participating in OHSP you may receive an OHOSP tax credit, depending on your income.

How the Plan Works

If you earn less than $ 40,000. a year, or if you and your spouse have a combined income of less than $ 80,000., you can benefit from the plan. To be eligable you must be an Ontario resident and have never owned a home or previously held an OHOSP.

OFOSP Tax Credit

While there is no limit to the amount of money you may deposit in your OHOSP, you can only receive OHOSP tas credits on annual contributions of $ 2,000. ($ 4,000. per couple) or less. Depending on your annual income and the amount you invest in your OHOSP, you can earn up to $ 500. individually or $ 1,000. per couple in OHODP tax credits.

For example, an individual who earns up to $ 20,000. and contributes $ 2,000. would receive a $ 500. tax credit. An individual who earns $ 35,000. and contributes $ 2,000. would receive a $ 125. tax credit.

For couples, only one spouse can claim the OHOSP tax credit. A couple that earns a combined income of up to $ 40,000. and contributed $ 4,000. would receive a $ 1,000. tax credit.

You are eligible for tax creditsfor five consecutive years. You must close the plan and use the funds to purchase a home by the end of the seventh year, Otherwise, you must repay your OHOSP tax credits with interest.

You can open an OHOSP and earn interest at competitive rates, at ant participating financial instituation across Ontario.

Land Transfer Tax (LTT) Rebate

First-time buyers of newly constructed homes may receive a refund of land transfer tax up to a maximum of $ 2,000.

Only individuals who are at least 18 years of age, have not owned an interest in a home anywhere in the world and whose spouse has not owned an interest in a home anywhere in the world while he or she was a spouse of the individual, qualify as first time buyers. The first-time buyer must be buying a newly constructed home or an interest in a newly contructed home.

A qualifying buyer must aooly for a refund no later than 18 months after registrayion of the home purchase if a refund is not claimed at the time of registration.

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