21 May First Time Home Buyer? What You Should Know & How to Get Started
First Time Home Buyer? What You Should Know & How to Get Started
Buying your first home is an exciting milestone, but also a complex process that can be confusing. It is important to ask yourself a few questions: How is your financial situation? How secure is your employment? What are you looking for in a home and neighbourhood? Here are some steps and resources to help you understand the process and the options available to you.
First Steps:
- Register with an real estate agent / realtor®. An experienced real estate agent will explain and guide you through the process and steps. They will also set up a home search so that you will receive all new property listings that match your home search criteria. Working with an experienced Ottawa real estate agent who knows the nieghborhood(s) where you’re most interested in living will help your search go smoothly and efficiently.
- Make sure you are preapproved for a mortgage and get your finances in order before you start looking at homes. You don’t want to see a house that you love and not be able to afford it! Consider different loan options when shopping for a mortgage. There are many types of loans, and it’s important to make sure you understand the pros and cons of each before selecting one.
- Understand the language and terms of an offer to purchase a home or condo and the associated forms so that you are ready when the time comes. Your realtor® can assist with this.
- Select a lawyer and make sure everything is in place to send to your lawyer i.e, Insurance, Preapproval letter, Agreement of Purchase and Sale and any other relevant documents for the closing process.
- Understand the Changes in Ontario Real Estate Services –the Trust in Real Estate Services Act (TRESA). Click here to learn more
Know Your Options:
NEW: 30 Year Amortization, RRSP Withdrawal Limits
New housing affordability measures have recently been announced by the Government of Canada’s Finance Minister.
A new amortization period has been released for first-time home buyers purchasing newly built homes, will be allowed to select a 30-year amortization period for those buyers in insured mortgages. This is up from the current maximum of 25 years and will become available as of August 1st, 2024.
First-time home buyers using the RRSP Home Buyers Plan, effective April 16th, 2024, can now withdraw $60,000 to use as a down payment for a qualifying home. This is up from the current limit of $35,000. For withdrawals made between January 1, 2022, and December 31, 2025, repayment will also change giving home buyers five years to begin repayment up from the original two-year requirement.
Quote from the Finance Minister;
“Faced with a shortage of housing options and increasingly high rents and home prices, many younger Canadians feel that the dream of homeownership is just that, a dream,” Freeland said earlier this morning. “Our government is changing that. We want homeownership to be a reality for younger Canadians.”
Government programs and grants
(Click on the titles below to learn more about each program)
Canada’s First Home Savings Account (FHSA)
As of April 1st, Canadians aged 18 or older who are purchasing their first home are eligible to enroll in a tax-free First Home Savings Account (FHSA). The FHSA combines elements of a Tax-Free Savings Account (TFSA) and a Registered Retirement Savings Plan (RRSP), allowing users to make tax-deductible contributions and tax-free withdrawals from the account for the purposes of saving for a home.
Home Buyers’ Amount Tax Credit
You can claim a non-refundable tax credit if you purchased a qualifying house (which could be a single-family house, semi-detached house, townhouse, condo or duplex, among other options) and you are considered a first-time home buyer.
Home Buyers’ Plan
Effective April 16th, 2024, can now withdraw $60,000 to use as a down payment for a qualifying home. This is up from the current limit of $35,000. For withdrawals made between January 1, 2022, and December 31, 2025, repayment will also change giving home buyers five years to begin repayment up from the original two-year requirement.
GST/HST New Housing Rebate
If you purchased a new or renovated home as a primary residence, or renovated your home, you can recoup part of the tax you paid on the purchase price or build.
Canada Greener Homes Loan
You may be eligible for grants or interest-free loans (up to $40,000) to help make your home more energy efficient.
We are up-to-date on the current market, the processes and procedures and would be happy to help you find your home. If you have any questions about the greater Ottawa neighborhoods and the Ottawa real estate market, feel free to contact us!