First time home buyer? Get Up To $11,602 “Free Money”!!
Have unused RRSP room? Depending on your tax bracket, depositing your down payment of up to $25,000 in your RRSP can grant you up to $11,602 as a tax refund (“Free Money”). Your down payment only has to be in your RRSP for 90 days before you can take it back out using the RRSP First Home Buyers’ Plan (without having to repay the tax refund). So your $25,000 down payment could become $36,602! (double that to $73,204 if you and your partner both do this!).
Realistically most first time home buyers are not in the highest tax bracket so the “free money” will very likely be less, but the tax deduction can still put thousands of dollars in your pocket. The First Time Home Buyers Plan does require you to pay back to your RRSP the funds withdrawn over 15 years. But you can keep the “free money”! Let’s talk about whether this makes sense for you or not.
Already Have An RRSP?
You’ve already got the gift of free money on your tax return! You can still draw $25,000 EACH from your RRSP towards the down payment of your house TAX FREE!
Land Transfer Tax Rebate
The Ontario government will refund you up to $2000 from the land transfer tax you pay on your first home!
First-time Home Buyers’ Tax Credit
Make sure to talk to your income tax preparer so they can file for the $750 tax credit!