A Little Help for First Time Home Buyers in Federal Budget 2009
February 1st, 2009 Categories: First Time Buyers, Mortgages, Economics, Finance, Real Estate News
1. Can withdraw up to $25k (formerly $20k) from Your RRSP when buying first home
The maximum amount that can currently be withdrawn from an eligible person’s RRSP under the Home Buyers Plan is $20,000. The Budget proposes that this withdrawal limit be increased to $25,000 for withdrawals made after January 27, 2009.
You are not considered to be a first-time home buyer if, at any time during the period beginning January 1 of the fourth year before the year of the withdrawal and ending 31 days before the withdrawal, you or your spouse or common-law partner owned a home that you occupied as your principal place of residence.
Special rules apply where the home is being acquired for the needs of a disabled person.
Amounts withdrawn must be repaid over a 15-year period, or the unpaid amounts will be included in taxable income.
2) First-Time Home Buyers’ Tax Credit
The Budget proposes a new non-refundable tax credit for first-time home buyers who acquire a qualifying home after January 27, 2009. (The closing date for the purchase of the home must be after that date in order for the tax credit to be available.)
The amount upon which the tax credit is calculated is $5,000, multiplied by the lowest personal income tax rate for the year (15%). The First-Time Home Buyers’ Tax Credit may be claimed in the year in which the home is acquired.
A “qualifying home” is a home which the person or the person’s spouse or common-law partner intends to occupy as their principal place of residence not later than one year after the acquisition.
This new tax credit will also be available for the acquisition of a home acquired after January 27, 2009 either by an individual who is eligible for the Disability Tax Credit (”DTC”) or by an individual for the benefit of a relative who is eligible for the DTC. The home must be acquired to enable the DTC-eligible individual to live in a more accessible dwelling or in an environment better suited to the person’s needs.
The First-Time Home Buyers’ Tax Credit may be claimed either by the person who acquired the home or by his or her spouse or common-law partner. If a qualifying home is purchased jointly, the total amounts claimed by the couple cannot exceed the credit that could be claimed if only one individual had acquired the home.
So First Time Buyers, you are now in a perfect storm, with interest rates at an all time low (prime=3%), a downward adjustment in prices since the economic meltdown in Ocober 08, and a lot of homes on the market.
Give me a call to find out all the relevant information!
This entry was posted on Sunday, February 1st, 2009 at 8:07 pm and is filed under First Time Buyers, Mortgages, Economics, Finance, Real Estate News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
