February 28, 2019 SEP Dev

Recent Inquiry – First Time Home Buyer

Question from caller: “I was a previous home owner, but I was wondering if could be considered as a first-time home buyer again?

This is a very great question because there are different programs that exist for first time home buyers and qualifications for these programs are actually dependant on how each defines the term “first time home buyer”:

Land Transfer Tax Rebate:

For this program, the definition of the first-time home buyer is straight forward. You can only be a first-time home buyer if you (or your spouse) had never previously owned a home before. This means, that you can only qualify for this program once…

Home Buyers Plan – using your RRSP towards your Down payment

If you are interested in using your RRSP towards your down payment You must be a first-time home buyer as defined by the CRA: “You are considered a first-time home buyer if, in the four year period, you did not occupy a home that you or your current spouse or common-law partner owned.”

Down payment of less than 20%:

A common misconception is that this program is for first time home buyers. This is probably because most first-time home buyers are likely to use this program due to the lack of available funds for their down payment. The reality is that, although first time homebuyers are less likely to have sizable down payments (greater than 20%), any one can put a down payment of less than 20% as long as they meet the insurers qualification guidelines. This means that you could technically buy repeatedly with the minimum 5% down payment, if the home is your primary residence. In other words, let’s not refer to this rule as a first-time home buyer rule, but rather an owner occupied/primary resident rule.

It’s completely understandable to be confused with the rules surrounding the various first-time home buyer programs that’s are available. If you have any questions or would like to learn more about how we can help you, please feel free to reach out to us today – (905) 455-5005

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