You’ve decided to take your first steps into home ownership – congratulations! Buying a home, whether it’s your first or not, is one of the largest investments you will probably ever make. If you feel a little overwhelmed at first, that’s okay!
Here are seven valuable resources for you to use as a first-time home buyer to ensure you receive all the incentives, benefits and help needed in making your purchase a successful one.
First-Time Home Buyer’s Tax Credit
The housing market plays a significant role in the overall health of Canada’s economy, which is why the federal government wants to make it easier for you to enter it. For this reason, the Government of Canada introduced a First-Time Home Buyer’s Tax Credit.
This resource will offer a tax credit based on the minimum income tax rate (currently 15%) multiplied by $5000 to help you buy your first home. So you could be saving $750 on your tax return this year!
Home Buyers’ Plan
This is another incentive that will allow you more access to your own money in order to make buying your first home a reality. Under the expanded Home Buyers’ Plan, you can draw up to $25,000 from your RRSPs in order to purchase your new home. You have to have made a contribution at least 90 days prior to a withdrawal and the total taken out must be paid back within 15 years.
You may qualify for a GST rebate on the purchase of a newly built home if it costs less than $350,000, or a partial rebate if the value is less than $450,000. However, you only have two years after either the home’s construction was completed or the home was occupied (whichever came first) to apply for the rebate.
For houses valued at $350,000 or less, the rebate is typically 36% of the GST cost, up to a maximum of $6,300.
Many home builders and land developers will provide promotional pricing on their homes and lot prices when the local housing market is particularly competitive. These savings will vary depending on the builder or developer providing them, and may only be available on certain models or in certain communities. If you are looking at purchasing a new build home, it’s always worth asking.
This tool will ensure you don’t dive into your home search without an understanding of what you can expect to pay. A mortgage calculator will determine how much each mortgage payment will be by determining the mortgage’s total amount, payment frequency, the interest rate on your mortgage, and its amortization period.
By using this tool you can see approximately how much your mortgage payments will be every month.
Mortgage Affordability Calculator
This affordability calculator developed by the Canada Mortgage and Housing Corporation will assist you in determining the maximum mortgage you can afford. It will break down your income, debt payments, monthly expenses and mortgage details to estimate what you will be able to afford every month.
Home Hunting Comparison Worksheet
Determining whether you can afford to buy a home, and if so, how much, is only half of the battle. The next step will be to actually find a home you want to spend the next several years of your life in. The Canada Mortgage and Housing Corporation have produced a comprehensive worksheet for anyone searching for their next home.
This resource will come in handy particularly for first-time home buyers because it provides a detailed checklist that you can bring with you for every home that you view. The worksheet looks at annual costs, the neighbourhood, the home’s exterior, and details for every room in the home.
You can view multiple homes and then compare all of them later with details you’ve filled out on your spreadsheet.
When entering the housing market for the first time, it can be very easy to get lost in all the industry-speak that gets tossed around. This new home terminology glossary will make sure that nothing gets lost in translation.
It’s natural for first-time homebuyers to have a lot of questions, but with the right resources at your fingertips, you’ll feel much more at ease as you start searching for your next home. The showhome staff in our communities are on hand to answer whatever questions you may have and would love the opportunity to assist you.
Happy house hunting!
Originally posted July 19, 2016, updated October 5, 2018