Home Buyer's Incentive Programs Summarized

The following includes a summarized version of the details for each program for simplicity

Home Buyers Plan (HBP)

This Canada Revenue Agency (CRA) program allows Canadians residents to borrow up to $25,000 from RRSP’s to use towards the purchase of their home. The advantage of this is that this money is not subject to withholding tax. It is technically a loan though, so it must be repaid over the course of 15 years. The program is also commonly believed to only be available to first-time home-buyers, however those who have owned before but not in the previous 4 years are also eligible, provided they haven’t used it before and still have a balance owing from the previous Home Buyers Plan.

Home Buyers' Tax Credit

You are eligible for the HBCT if you or your spouse or common-law partner acquire a qualifying home and you did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years. You must intend to occupy the qualifying home.The HBTC is calculated by multiplying the lowest personal income tax rate for the year (which was 15 per cent in 2009) by $5,000, which would have been a $750 credit. Google “Line 369 – Home Buyers Amount” for more details.

First Time Home Buyers Program (BC)

Property Purchase Tax Exemption.In British Columbia, when someone normally purchases a property, they are subjected to the Property
Transfer Tax. This tax is applied at a rate of 1% of the first $200,000 purchase price, and 2% of every dollar thereafter. For example, for a $300,000 property, you would have to pay $4,000 (1% of $200,000 + 2% of $100,000).First Time Home Buyers are exempt from the Property Purchase Tax under the following conditions. -The buyer must not have owned an interest in a principal residence anywhere worldwide. -Purchasers must be Canadian Citizens or permanent residents and have resided in B.C. for a minimum of 12 months proceeding purchase date. -Maximum purchase price is $475,000. Partial exemptions are available on purchase prices between $475,000 and $500,000. -Property must be owner occupied principal residence. Rental or investment properties do not qualify. -The land is 0.5 hectares (1.24 acres) or smaller. 

HST Credit

It is changing due to the fact that the HST is being eliminated and is being returned to the old two-tax system of the GST and PST. As of April 1, 2012 until the HST is phased out, purchasers of new homes will be able to save 5% of the HST on up to $850,000 of their purchase, for a maximum “savings” of $42,500.

First Time Home Buyers Bonus (BC)

The bonus is a one-time payment worth up to $10,000. BC residents who are first-time home buyers and who purchase an eligible new home after February 20, 2012 and before April 1, 2013 may be eligible for this bonus.

CMHC Eligible Energy-Efficient Building Program

CMHC encourages the development of more energy-efficient homes by making eligible a broader range of home building programs. If you purchase a home that meets the energy efficient standards and has the certification, you may qualify for a 10 per cent mortgage loan insurance premium refund when CMHC Mortgage Loan Insurance is used to finance the purchase or construction. 

CMHC Purchase Plus Improvement program.

-95% Loan to value.
-Based on the Future Value.
-Funds released upon completion.

How it works:

-Purchase price is at the “as is value.”
-Submit your invoice and or quotes from the contractor outlining the renovations.-CMHC will approve up to 10% of the “as is value” no maximum dollar value.
-The mortgage is advanced to accommodate the purchase and registered at the “future value” after the renovations are complete.
-Lawyer will hold back the extra funds based on the invoices provided. And, upon a final inspection will advance the funds when 100% complete and the “Future Value” is confirmed.   

**The information contained in this Web site is intended solely to provide general guidance on matters of interest for the personal use of the reader, who accepts full responsibility for its use. The authors and publishers are not responsible for any errors or omissions.Each program has details that were not covered above that may have to be met for you to qualify. Please satisfy yourself as to the full details of the programs you re interested in.If you are aware of any errors or omissions and/or programs we may have missed please let us know.

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