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First Time Homebuyer Tips

First-Time Home Buyers’ (FTHB) Tax Credit

The costs associated with purchasing a home, such as legal fees, disbursements and land transfer taxes, can be a particular burden for first-time homebuyers who must pay these costs, as well as save money for a down payment. To assist first-time homebuyers with the costs associated with the purchase of a home, the Government of Canada introduced a FTHB Tax Credit in 2009 — a $5,000 non-refundable income tax credit amount on a qualifying home acquired after January 27, 2009. For an eligible individual , the credit will provide up to $750 in federal tax relief starting in 2009.

Expansion of the Home Buyers’ Plan (HBP)

To provide first-time homebuyers with greater access to their RRSP savings to purchase or build a home, the Government of Canada has increased the Home Buyers’ Plan withdrawal limit to $25,000 from $20,000 per person for withdrawals made after January 27, 2009.

To obtain more information on the First-Time Home Buyers’ Tax Credit and the Home Buyers’ Plan, call 1-800-O-Canada or visit the Canada Revenue Agency website at www.cra.gc.ca .
Land Transfer Tax Rebate.

The qualifying purchaser will receive a rebate to the land transfer tax this is applied to the home purchase. The maximum allowance is $2000.00. Examples:

Cost of Home	Tax Payable	Tax Refund	Net Tax Payable
$100,000	$725	$725	$0
$200,000	$1,725	$1,725	$0
$300,000	$2,975	$2,000	$975