Tips for New Home Buyers

Tips for Building Your First Home

We love working with a wide range of clients, from first time home buyers to seasoned homeowners who know exactly what they want in their next upgrade. Here are some tips if you’re building a new home for the first time:

• Did you know that you may be eligible to withdraw up to $25,000 tax free from your RRSP to build a new home? Learn more about the Government of Canada’s Home Buyers’ Plan
• Refer to our Calculate House Payment page for useful worksheets that can help first time home buyers determine what you can afford for a down payment, monthly payments and price range
• Read about the government’s First Time Home Buyer’s Tax Credit below to see if you qualify
• Consider getting pre-qualified for your mortgage (this will give you immense peace of mind and allow you to enjoy the new home shopping experience)
• A 20% down payment on your new home can save you thousands of dollars over the long term (an insurance premium is required if your down payment is less than 20%)
• Making bi-weekly payments instead of monthly payments (that’s just 2 extra payments per year) can have a significant impact on your mortgage; ask your lender for more details
• Find even more valuable resources here.

At Coventry Homes, our first time home buyers program consists of the following steps: purchasing your home, arranging for your mortgage, new home selections, construction, orientation, closing on your home, move-in, follow up. We support this entire process with a comprehensive Homeowner Guide that assists you through every step.

New Home Buyers Tax Credit

As part of Canada’s Economic Action Plan in 2009, the Government of Canada enacted a non-refundable first-time home buyer’s tax credit. This home buyer credit is based on the lowest personal income tax rate for the year and can be claimed by the named homeowner, the spouse of the homeowner or can be divided between spouses. This new home tax credit is also available as a disability tax credit (DTC) to individuals who qualify.

The Canadian Tax Calculator includes the first-time home buyer’s tax credit. For more details and qualifying information on the new home tax credit for first-time buyers, visit Canada Revenue’s website.

Eligible homes include single-family homes, semi-detached homes, townhouses, mobile homes, condominium units, as well as apartments in duplexes, triplexes, fourplexes, and apartment buildings.

Home Buyer’s Plan

Another program that was updated in the Economic Action Plan was the Home Buyer’s Plan (HBP). The HBP now allows first-time home buyer’s to withdraw up to $25,000 (tax-exempt) from a Registered Retirement Savings Plan to build or buy a new home. Again, details can be found at the Government of Canada’s website .

The home buyers tax credit and home buyer’s plan may help you get one step closer to building the home of your dreams! Discuss these important programs with your accountant or preferred lender.