FIRST TIME BUYER
The Home Buyers’ Plan (HBP) is a government program which allows first-time home buyers like you to gain financial autonomy. You can become happy homeowners while at the same time building a retirement fund within a Registered Retirement Savings Plan (RRSP).
Is the HBP right for me?
Of course! And what’s more, while you’re fulfilling your dream of owning a home, you’ll also be getting income tax refunds worth thousands of dollars. For spouses who work, these refunds can be between $10,000 and $21,000, which is quite sufficient to purchase your first home. The HBP allows each taxpayer to withdraw up to $20,000,tax-free, from their Registered Retirement Savings Plan (RRSP) to purchase a home.
But I’ve never contributed to an RRSP…
It doesn’t matter. You can still take advantage of the HBP, as long as you are earning, or have earned in the past, an income entitling you to contribute to an RRSP. By contributing the maximum possible amount to your RRSP, you’ll receive generous income tax refunds
But I don’t have enough money to contribute to an RRSP…
It’s easy to contribute up to $20,000 to your RRSP, because allowable unused contributions since 1991 can be fully used and deductible. Also, if you take out a 90-day loan from your financial institution, and pay it back immediately after the 90-day period using money withdraw from your RRSP, you will legally obtain your income tax deduction. Afterwards, you will have almost 18 years to reinvest the money in your RRSP, without interest. It’s a simple strategy with fabulous results!
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EXPENSES TO ALLOW FOR PRIOR TO SIGNING THE DEED OF SALE
- Building Inspection
- Mortgage Arrangements: Conventional mortgages require 20 % cash contribution
Mortgages insured by CHMC require less than 20 % cash contribution
- Offer to Purchase Deposit
EXPENSES TO ALLOW FOR WHEN SIGNING BEFORE THE NOTARY
- Notary fees
- Tax redistribution and refunds : Refunds are calculated from the date of the signing of the deed of sale. You are responsible for reimbursing the seller for the number of days paid to date for Municipal taxes and School taxes
- Heating oil tank : The seller is required to have the tank filled on the day of the signing of the deed of sale and submit the invoice to the notary for reimbursement in full by the buyer.
- Electricity meter (Hydro Québec) : The buyer and the seller must notify Hydro Québec of the date the property is scheduled to change hands, have the meter read, and ensure that all amounts owing are properly allocated.
- Homeowner Insurance : Upon signing of the deed of sale, you must present proof that you have contracted homeowner’s insurance in an amount equal to or greater than the mortgage on the property.
Knowing what to expect when you buy a house can make the difference between a smooth transition to your new home and one that is stressful. Talk to Ron, he has helped over a thousand families buy a West Island Home.
A recent opinion piece by a well-known Canadian journalist has pointed the finger firmly at embezzled Chinese funds as the cause of high Canadian property prices.
Michael McCarthy’s opinion piece in the Vancouver Sun pulls no punches whatsoever – accusing Vancouver’s officials of sitting on their hands while “hot” Chinese money pours into the city. McCarthy cites a Bank of China report claiming up to 18,000 officials have fled China with hundreds of billions of illicit dollars – an estimated $7 million per official – some of which he contends, is laundered through Canada’s property markets.
It could be easily argued that McCarthy’s claims are xenophobic, and it’s hard to tell exactly how much of the recent price boom has been driven by Chinese money – although a 2011 report by Landcor Data showed that 74 per cent of luxury purchases in Richmond and Vancouver’s super-pricey west side were made by buyers with “Mainland Chinese names”.
Whatever the truth of the matter, there are agents willing to do their best to take advantage of any Chinese gold rush. Vancouver’s Macdonald Realty, meanwhile, has already take those first steps, preparing to establish an office in Shanghai.
“While there is very little data about foreign investors in Vancouver real estate, our own internal data is enough for us to commit to investing in a representative office in Shanghai,” Dan Scarrow, vice-president of corporate strategy at Macdonald Realty, told the Globe and Mail.
It may be time to brush up on your Mandarin language skills…
A bank-owned foreclosure is a home that has gone into foreclosure because the previous owner has not kept current on the required payments. The bank or lending institution then takes ownership of the property as collateral on the loan that went into default. Banks, as a general rule, are not in the business of owning property or real estate, so they do as much as they possibly can to make sure that these homes are sold quickly as they are lose money by keeping the property in their inventory. As a result, these foreclosures are usually sold at a decreased price and are usually below market value.
Foreclosure homes can usually be purchased 5% to as much as 50% below market value!
To sign up for a free list of foreclosure properties the moment they hit the market, please fill out the short form below:
Subscribe to our foreclosure mailing list…
VISUALIZE YOUR DREAM HOME
The best way to save time and energy is to write down everything you are looking for in a new home. Let your imagination go. Then, call Ron to discuss your goals.
PRIORITIZE YOUR NEEDS
After you create your “wish list,” prioritize each item. Picture your family’s everyday activities and habits. This will give you a clearer picture of the home that best suits your needs.
PUT THE PIECES TOGETHER
Analyze the locations and the neighborhoods you are considering. Ron can provide information on school systems, taxes, shopping centers, and cultural activities.
PRE-QUALIFY & PRE-APPROVAL
To save yourself time and possible disappointment, Ron always recommends using a qualified mortgage broker for pre-approval and clarification of your personal financial options before you start house hunting. Find out your mortgage limit and your down payment requirements. A pre-approval is a guarantee that you can qualify for financing to a maximum purchase price and loan amount.
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 from your registered retirement savings plan (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability .
Your RRSP contributions must remain in the RRSP for at least 90 days before you can withdraw them under the HBP, or they may not be deductible for any year.
Generally, you have to repay all withdrawals to your RRSPs within a period of no more than 15 years. You will have to repay an amount to your RRSPs each year until your HBP balance is zero. If you do not repay the amount due for a year, it will have to be included in your income for that year.
If you’re applying for a “HBP (Home Buyers Plan)” RRSP loan, you need to fill out the following 2 forms:
Refer to the guide RC4135, Home Buyers Plan (HBP) guide to do so or consult your financial advisor.
For more information, click here