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3 Home Buying Resources You May Not Know About

3 Home Buying Resources You May Not Know About

If you’ve ever looked at the price of a new house and immediately backed away with your hands in the air, you should know that there are several ways to lessen this particular financial burden. Here are just three.

First-Time Home Buyers’ Tax Credit

The First-Time Home Buyers’ Tax Credit (HBTC) allows you to claim $5,000 in income tax credit if you purchase a qualifying piece of real estate as a first-time buyer. While it won’t help you make an actual down payment on a home, it can provide a little relief when tax season rolls around. 

There are two main restrictions when obtaining the HBTC:

  • You and your spouse must purchase a qualifying home. This includes townhouses, duplexes, mobile homes and single-family homes. Homes currently in construction are also acceptable.
  • You and your spouse can’t have previously lived in a house that one of you owned. This applies to both the year that you apply for the tax credit and the four years preceding it.
  • You can also qualify for the First-Time Home Buyers Tax Credit if you’re legally disabled; in this case, you don’t have to be a first-time buyer.

The great thing about the this credit is that it’s designed to help people who are just starting their journey into home ownership. It encourages renters to become buyers, so if you’re ready to make this transition yourself, include the HBTC information on your next tax form.

Home Buying Resources You May Not Know About Piggy Bank imageHome Buyers’ Plan (HBP)

If you have a registered retirement savings plan (RRSP), the HBP lets you withdraw $25,000 from it to help you build or buy a home. This can be a great way to avoid debt as you purchase your first residential property, but keep in mind there are certain procedures and requirements for the process:

  • You can’t withdraw more than $25,000 in a single calendar year.
  • You must have a written agreement or contact that states you’ll build or buy a home with the money.
  • You have to be a first-time home buyer. This doesn’t necessarily mean that you’ve never purchased real estate before; if it’s been more than four years since you bought your last home, the counter resets. You’re considered a first-time buyer again.

If you think you might qualify for the Home Buyers’ Plan, fill out a T1036 form and send it off to the appropriate authorities. You could be in for good news as you seek new ways to finance your new home.

GST/HST New Housing Rebate

This rebate can put a little money back into your pocket if you built a new house or made substantial renovations to an existing one. It will come from either the goods and services tax (GST) or the harmonized sales tax (HST) that you paid on your new residence.

There are many different housing rebates that you can claim, including:

  • The owner-built rebate. This means you built the home yourself or directly hired someone else to do it.
  • The renovation rebate. If you purchased a home from a builder and replaced at least 90 percent of its interior, this counts as a “substantial” renovation that can get you the relief of the GST/HST.

There are also a variety of tax-related rebates depending on your location. Do your research to determine if you qualify for any of them.

You don’t have to worry that you’ll need to keep renting while draining your bank account to build or buy your own home. With resources like these, it’s easier than ever to purchase your dream space and still maintain a sense of financial security. You’ll just have to utilize these tools like you mean it!


Photo credits: woman calculating bills, piggy bank

About The Author

Jeff S.

Proud father and husband. Loves music, Nine Inch Nails, UFC and inbound marketing.

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