There is good news coming for anyone thinking of buying their first home, especially if that new home will be priced under $368,334 come January 2017. The Ontario government has announced plans to change the first time home buyer credit from $2,000 to $4,000. Most people have no idea what that means to them, so let’s have a little fun with math!
Although there is a math equation involved, you don’t really need to know the in’s and out’s of the equation. For simplification, there are online Ontario Land Transfer Tax Calculator’s available to use free of charge, like the one I linked in this sentence. Anytime land exchanges hands (ie. when you buy a home) the government taxes that transfer. To help promote home sales, the province of Ontario has given a first time home buyer rebate for years, totalling $2,000. That amount meant if you were purchasing a home priced below $227,000, you had a credit large enough to cover that tax. In January 2017, the first time credit will double to $4,000, meaning if you are purchasing your first home under $368,334, the tax will be covered. If you are paying more than that amount, you have to cover the difference. To cover that difference, it would be added to your mortgage amount.
Unfortunately, if you have purchased a home, and it closes before January 1st, 2017, you do not get the extra $2,000 in the credit. Unless you can delay your close until the new year, it’s just a bit of bad timing. And if you are like me, and have already purchased you first home, there is no getting to use that extra bit of credit for your new home either. If I’ve confused you at all and need some clarification, or have questions, please let me know. You can contact me by email, firstname.lastname@example.org, call 519.663.9411 or catch me on Facebook.