RRSP's AND BUYING

It's now a whole lot easier than you may think to buy your first home and with interest rates near all time lows, there's rarely been a better time!

If you (or someone you know) wants to buy a first home and can answer YES to all of the following four questions, you (or they) should qualify for the Government of Canada "First Home Buyer's Plan".
  

1. Is this the first time you've used the Home Buyer's Plan?
2. Do you intend to use the home you purchase as your principal residence?
3. Are you a Canadian resident? (Canadian citizenship is NOT a requirement)
4. Is this the first home you've bought (or shared in) during the past 5 years?

USE THE FORM AT THE BOTTOM OF THIS PAGE TO GET MORE INFORMATION
ON THIS GOVERNMENT OF CANADA PROGRAM.

What is the Home Buyer's Plan (HBP)?
The HBP is a Government of Canada program to make home ownership easier for first time home Buyers. It allows you and your spouse or partner to take up to $20,000 each out of your R.R.S.P. (Registered Retirement Savings Plan) tax free and interest free to be used toward the purchase of your first home.

But I don't have any funds in an R.R.S.P.
No problem! You can still take advantage of this program. If you have been earning income for the last few years you should qualify to make a significant contribution into a tax deductible R.R.S.P. This will reduce your income tax payable in the following year and these tax savings can be added to your down payment as well. What could be sweeter than buying a home with money you would have otherwise turned over to the tax man?

But I don't have any money to make a contribution.
Again, no problem. Arrangements have already been made with major lenders for qualified first home buyers to borrow the funds required to open or add to a tax deductible R.R.S.P. This will give you a tax rebate which can then be used as part of your down payment. 90 days later you can withdraw the funds from your R.R.S.P. to pay off the loan. The program does require you to repay the withdrawn funds back into your R.R.S.P. over the ensuing 15 years failing which you would have to pay income tax on 1/15th of the total in any year that it was not repaid. This is a win-win situation with the benefit being that 15 years from now you can have both a Retirement Savings Plan and a home with 15 years of equity built up in it.

How do I find out how much I can contribute to an R.R.S.P.?
Review your tax returns going back to 1991. You should have received a letter from Revenue Canada following your filing which will specify exactly how much you were entitled to contribute to an R.R.S.P. Add up the total amount over the years to a maximum of $20,000 each, which is the total you and your spouse or partner can each withdraw under this plan. (Two people can withdraw $40,000). If you can't find the information you need, call Revenue Canada for help.

What other programs do I qualify for as a "first time buyer"?
In the Greater Vancouver area, if the home you purchase costs $250,000 or less, you can buy with as little as a 5% down payment. You will of course have to qualify to handle the resulting mortgage payments, property taxes etc. Your qualification is based on your gross income versus total debt service. This and other programs have been designed to help first time buyers. By simply taking a moment with the form below you will receive additional information and help in determining your qualifications. There is no obligation and it always pays to know your options. This should be a first step for anyone considering a home purchase.


For the first time buyers that are looking to buy in the Mississauga Real Estate area, the above is a home buying plan for you. This is what you need to know and how to obtain the information needed to be successful with your first home purchase.  

Mississauga Homes for Sale

Get the best assistance in buying or selling properties and homes in Mississauga. If you're interested new Mississauga homes, Port Credit homes, Milton homes, or Erin Mills homes, contact us now. We have many contacts with builders in these communities. Check our home listings page. We may be able to help you with new homeowner programs and assistance in applying for mortgages. 2010 is going to be a great year for many looking for homes in the Mississauga and Milton area.