Land Transfer Tax Rebates (Provincial and Municipal)

First-time home buyers of new and re-sale homes are eligible for rebates on the provincial and Toronto land transfer taxes. The maximum provincial rebate is $2,000 and the maximum Toronto rebate is $3,725.

Provincial LTT:

• The maximum rebate of $2,000 is equivalent to the LTT paid on a $227,500 property.
• Calculation of the LTT is as follows; 0.5% of the purchase price to $55,000, plus, 1% between $55,000 and $250,000, plus, 1.5% between $250,000 and $400,000, plus, 2% above $400,000

Toronto LTT:

• The maximum rebate of $3,725 is equivalent to the LTT paid on a $400,000 property.
• Toronto LTT is in addition to any provincial LTT.
• Calculation of the LTT is as follows; 0.5% of the purchase price to $55,000, plus, 1% between $55,000 and $400,000, plus, 2% above $400,000.

For an easy-to-use LTT calculator, visit www.nohomebuyingtax.com

Five Per Cent Down Payment Program

With 5% down payment, all home buyers have access to mortgage insurance allowing them to buy a home, as long as they meet the standards of a 5 year fixed-rate mortgage.

Note:

• Buyers using this Program can consume 32% of their gross monthly household income for payments of principal interest property taxes and heating. Also note that total debt load cannot exceed 40% of monthly income.
• Insurance premiums will be 2.75-2.9% on the mortgage loan and yes, can be added to the mortgage.
• Borrowers will be required to demonstrate an ability to cover closing costs of at least 1.5% of the purchase price.
• If the proceeds are coming as part of a financial gift, this amount must be in the possession of the buyer for at least 15 days.
• Non-owner occupied properties are not eligible for the insurance and are therefore required a 20% down payment.

For more information call CMHC at 1-800-668-2642 or through www.cmhc.ca

HST Housing Rebate

The purchase price of resale homes are exempt from HST, however, the purchase price of newly constructed homes are subject to HST.

New home buyers can apply for a 36% rebate of the GST (federal portion of HST) on the purchase price to a maximum of $6,300 for homes costing $350,000 or less. For new homes priced between $350,000 and $450,000, the GST rebate would be reduced proportionately. New homes priced $450,000 or higher would NOT receive a rebate.

Also, new home buyers can apply for a 75% rebate of the PST (provincial part of HST) on the purchase price to a maximum rebate of $24,000.

New Mortgage Rules

Well…where do I begin? Carney and Flaherty have been doing their part to curb our seemingly insatiable appetite for debt. Their rhetoric has made us think about our spending habits, and perhaps even made some of us nervous about it.

So what’s happening? Well…in terms of borrowing money to buy a home, it is slowly getting more difficult to qualify for a mortgage. The new rules imposed by Flaherty lower government-backed mortgage amortisation to 25 years from 30 years…and even 35 years not long ago.

So what does all this mean? If you are putting less than 20% down, you require mortgage insurance. This insurance is offered through companies like CMHC (Canada Mortgage and Housing Corporation). It is backed by the government and therefore subject to their new rules and regulations. The shorter the amortisation period, the higher your monthly payments. On top of that, you’ll now have to qualify accordingly. But don’t panic. If you are already in a 30 or 35 year amortised mortgage, then you will be able to remain in such providing you do not increase your principle on renewal.

We clear yet? Well..how about we make the water a little muddier. If you’re purchasing a house worth over a $1 million, you will no longer be offered the insurance (barring exception). Therefore…and this part hurts…you are required to put a whopping 20% down.

Ouch!