Tax Rules for Home Buyers
If you’re one of the many Canadians who dream of home ownership, and you’re working hard to make this goal a reality, you should know that the Canada Revenue Agency has two programs that can help you get there faster.
There is the First Time Home Buyers’ Plan. Because the required down payment on a house purchase can be a stumbling block, the government will actually let you borrow the money to put down on your dream home – from yourself.
Under the rules of this program, you are allowed to take money out of your RRSP to help buy your home – up to $25,000. This money will remain sheltered from tax, so long as you pay it back within 15 years. This is a great way to put your retirement savings to work for you today, without the considerable tax consequences of withdrawing it outright. The only downside is that you won’t be earning interest on your investment, but that might be outweighed by the interest cost saved by using your own money instead of a loan.
Another helping hand for new homeowners from the CRA is the First-Time Home Buyers’ Tax Credit on your tax return. It’s a non-refundable tax credit that can put money in your pocket by reducing the amount of tax you owe for the year in which you buy your house.
Both of these programs are for first-time buyers only, and are designed to help you get yourself into the real estate market. If you have questions about these programs (or any other areas of estate planning or financial management), contact YourStyle Financial Inc. We take the financial stability or our clients very seriously, and can help you get your financial house in order, so you can get into the house you want.
We’re more than an investment company – we tailor financial plans individually, to fit each one of our clients. If you’re thinking about jumping into the real estate market, we can help make sure you do it with both eyes open.