If you live in Kitchener-Conestoga area, you probably know Harold Albrecht is your MP. This week Harold sent out a handy little “Tax Guide” to his constituents designed to help residents of Waterloo Region save money through awareness of the various tax breaks we can take advantage of.
Harold covers tax deductions for families, seniors, working Canadians and job creators, and of course for home buyers. If you haven’t received this tax guide, we would like to go over the section Lower Taxes for Home Buyers.
First-Time Home Buyers’ Tax Credit
If you are a First Time Homebuyer, you can receive a credit on your income tax that allows you to save up to $750 on qualifying homes purchased after January 27, 2009. This tax credit is also available to existing homeowners who are eligible for the Disability Tax Credit (DTC) who purchase a home that is more accessible or functional for them. Other individuals who qualify for the DTC tax credit are people who purchase a home for the benefit of a disabled family member who is related to them by blood, marriage, common-law or adoption.
Home Buyers’ Plan
Saving for a downpayment for your first home is the most challenging step to home ownership. Home buyers in Canada usually have several income sources that contribute to the downpayment of their first home. The largest source is known to be from savings (56% of downpayments). There are various ways you can contribute to a downpayment; for instance you can have it “gifted” to you (this is true for 18% of Canadians). You can also withdraw from your Registered Retirement Savings Plan (RRSP). The amount that you can withdraw from your RRSP has been increased to $25,000 – a significant contribution to your total downpayment when you consider that in Canada the average downpayment for a first home is $67,060.
In the meantime, if you are first time home buyer looking for more information on pre-shopping for homes, arranging a mortgage, viewing homes or what is involved in a purchase offer, closing and moving – be sure to download our free Home Buyers Guide here. Wondering if you’re financially ready to buy a home? Read our article about financial preparedness by clicking here. If you have questions about any of the content in the Tax Guide, contact Harold Albrecht, MP by calling his office at 519-578-3777 or email him at harold@HaroldAlbrechtMP.ca.
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