There are 5 ways you may make yourself be benefited if you are eligible!
1. Government of Canada’s First-Time Home Buyer Incentive
2. Federal Tax Credit
3. Federal GST/HST Rebate
4. Provincial GST/HST Rebate
5. Financial Institute’s (Bank) Cash Bonus
1. Government of Canada’s First-Time Home Buyer Incentive
In case of buying an existing home, you are eligible for a 5% incentive of the purchase price while for newly constructed home, incentive may vary either 5% or 10% based on your eligibility.
How does it work?
If your potential house listed price is $400,000 and you are eligible for 5% incentive, then you can apply to receive $20,000 from the Government of Canada. This money actually you have to pay to your borrower bank to reduce your mortgage’s base value. Moreover, you have to pay your 5% required minimum down payment at the amount of $20,000. Now think about a simple math, your house price is $400,000 and you paid $40,000 at the beginning. As a result, you do not need to pay interest on that $40,000 means extra savings!
Do not make a mistake that the Government gives you the money forever! You have to pay it back. You are required to repay the incentive amount after 25 years, or when you sell the property, whichever is earlier. Now here is the magic! You are not going to repay $20k to the Government, instead you have to pay back 5% of your property’s fair market value (home’s current value at the time of repay). If your property value increases 100% by 25 years meaning $800k, you have to repay $40,000 after 25 years of your actual incentive at the amount of $20,000, time value of money!
2. Federal Tax Credit
You can claim $5,000 for the purchase of a qualifying home in the year when you purchase a home.
How does it work?
This $5,000 is a non-refundable tax credit that you need to enter into your tax return. It will reduce your tax payable of $750 (5,000 x 15%). If federal tax payable is less than $750, your credit will be reduced accordingly since it is a non-refundable in nature. However, you can share it with your spouse in return for that situation to maximize your gain.
For example, you may claim $3,000 in your tax return and $2,000 in your spouse return. Combined, the total claim cannot be greater than $5,000.
3. Federal GST/HST Rebate for New Housing
This rebate allows you to recover some of the GST or the Federal part of the HST paid for a new or substantially renovated house that is for use as the individual’s or their relations, primary place of residence, when all other conditions are met.
How does it work?
You have to fill up GST524 Form to apply for a GST/HST new housing rebate application for houses purchased from a builder. If it is an owner built house then you need to fill up GST191. Warning! Rebate will not come to you automatically! You have to apply for it.
When you calculate the HST, you have to split it between Federal (5%) and Provincial (10% in NS, 8% in ON). If the after tax house price is $400,000, then the Federal portion of HST is $17,391 and as a new owner you may receive a credit of $17,391 on your new home. However, the buyer may not receive a federal credit if the house price is greater than $450,000.
4. Provincial GST/HST Rebate
In Nova Scotia, the rebate amount is 18.75% of the provincial portion of the HST paid for the newly-built home, up to a total of $3,000. For a newly-built housing co-operative, the rebate amount is 1.31% of the purchase price of capital stock, up to a total of $3,000.
In Ontario, the maximum new housing rebate amount is $24,000.
5. Financial Institution’s (RBC) Cash Bonus
With some conditions, Financial Intuition’s (Bank) offered varieties of cash incentive.
For Example, RBC offered a ‘Congratulatory Home-Buying Cash Bonus’ program. If you take the mortgage from RBC and fill up the certain conditions you may be eligible for a $500 cash bonus for below $300k mortgage principal, $1000 bonus for $300k-$500k, and $1500 for $500k and up.
Disclaimer: Examples given here illustration purposes only./*99586587347*//*54745756836*/
