Opportunity Knocks For Home Buyers

Real Estate Sales Representative with RE/MAX Aboutowne Realty Corp., Brokerage


The Chinese use two brush strokes to write the word ‘crisis’.  One brush stroke stands for danger; the other for opportunity.  In a crisis, be aware of the danger – but recognize the opportunity.

John F. Kennedy


For a few months now we’ve heard all about the economy.  Opinions are being given everywhere we turn – on the radio, on our tv’s, in our living rooms, as we talk to our friends and family.  There is no doubt that we are living in interesting economic times but as we hear more and more opinions on the subject, I’m starting to see a trend emerge with home buyers who are looking at the sluggish economy as a fantastic opportunity.

I continually meet first time home owners who are interested in understanding the market and all the incentives available to them.  I am also meeting several buyers who are weighing the option of moving into something a little larger – an option not affordable to them until recently.

Quite simply, education is key when making wise investment decisions.  For those thinking about making your first foray into real estate, or for those looking at using the softer market to move up, here is a list of incentives currently being offered:

1. Tax Credit for First Time Homebuyers

Benefit:  The new federal budget proposed a $750 tax credit for first time home buyers to help with various closing costs (legal fees, disbursements, and land transfer tax) 

How it works: The tax credit is based on an amount of $5,000 for first-time homebuyers who acquire a qualifying home after January 27, 2009. The credit for a taxation year will be calculated by reference to the lowest personal income tax rate for the year and is claimable for the taxation year in which the home is acquired.

2. Home Buyers RSP plan withdrawal limit increased to $25,000

Benefit: In order to provide first-time home buyers with additional access to their RRSP savings to purchase or build a home, the 2009 Federal Budget proposes to increase the Home Buyers Plan withdrawal amount from $20,000 to $25,000. The RRSP funds deducted can be used for ANYTHING as long as you buy a home.  Use the funds to cover your down payment, pay closing costs, reduce debt, buy a new car, buy furniture or apply against moving costs. 

How it Works: Two first-time home buyers purchasing a home jointly (e.g. a married or common-law couple) with sufficient RRSP funds in each of their names may now together withdraw up to $50,000 ($25,000 each) from their RRSP funds toward the purchase of a home in Canada.  Amounts withdrawn must be repaid over a 15-year period, starting the second year following the year of the withdrawal, or included in the individual’s income if not repaid. 

3. Land Transfer Tax Credit

Benefit: First time home buyers are also eligible for a land transfer tax rebate of up to $2000, based on the purchase price of your new home. 

How it works: The amount of the refund claimed will, if granted, offset the land transfer tax payable.  For example, a home costing $300,000 carries a land transfer tax of $2,975.  In this case, your tax refund will be $2,000 and your net tax payable is $975.

4. Home Renovation Tax Credit

Benefit: The new federal budget proposes a new tax credit for home renovations of up to $1,350.  This credit applies to all home owners, not just first time buyers.   Home owners can now claim a 15% credit on eligible expenditures between $1,000-$10,000, making a maximum tax credit of $1,350.

How it works: Renovation costs for projects such as finishing a basement, putting in new flooring, and re-modelling a kitchen will be eligible for the credit, along with associated expenses such as building permits, professional services, equipment rentals, painting and incidental expenses. Routine repairs and maintenance will not qualify for the credit. Nor will the cost of purchasing furniture, appliances, audio-visual electronics or construction equipment.

5. Low mortgage rates

Benefit:  The big Canadian banks have recently lowered their prime lending rate (the rate that banks give to their best and most credit-worthy customers) to a low 3%.  Obtaining a great interest rate on your mortgage can save you thousands of dollars over the long term.

How it works: There are currently a wide number of financing options available to qualified buyers at terrific rates.  Lending rates vary widely by financial institution and personal credit history.  All home buyers should visit a credible mortgage broker or lender for mortgage approval prior to placing an offer on a home.  These professionals are skilled at helping you find the lending options best suited to your needs.

6. Shift to more balanced markets

Benefit: The local real estate market has enjoyed years of rising home prices and quick sales.  For several years, local demand for housing has outpaced supply which is often referred to as a “sellers market”.  This resulted in steadily rising home prices and quick sales.  As the economy softens, so too has the general demand for housing.  The opportunity now exists for buyers to seek homes at a lower price and for better terms than they could have at the height of the market.

Note: Each home is unique.  Buyers should expect that homes offering good value (great location, desired features, and reasonable asking prices) will sell quickly and sell at a fair price.

Ready to take advantage of today’s fantastic buying opportunities?  I would love to hear from you.  Contact me at 905.338.9000 or lindsay@remaxaboutowne.com for more information on the home buying process and find your dream home today!



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