The Four Step Home Buyers Action Plan
The federal budget introduced on January 27/09 offers several measures of interest to people who plan to renovate or buy a home. Here's how they could theoretically work in unison for a first-time buyer:
Step 1: Claim the First-Time Home Buyers' Tax Credit
First time home buyers who acquire a qualifying home after January 27, 2009. The non-refundable tax credit is calculated by reference to the lowest personal income tax rate for the year.
Details: Offers tax relief of up to $750 to first-time buyers to help
defray closing costs on their purchase. This comes off of any income taxes owing but cannot add to any refund (i.e. if you owe $500 in taxes after completing your return, this can reduce that amount owing to $0 and not result in a refund of $250) Only applicable to first time home buyers.
Step 2: Take advantage of changes to the federal Home Buyers' Program
Details: You can take up to $25,000 out of your RRSP to buy a first home
and pay no taxes, up from $20,000
Step 3: Renovate your new home with help from the temporary new Home
Renovation Tax Credit (HRTC)
The HRTC is a 15% non-refundable tax credit for eligible expenditures made in respect of eligible dwellings which would generally be considered to be an individual's principal residence. Eligible expenditures include labour and building materials for a renovation that is of an enduring nature.
The HRTC applies to expenditures, in excess of $1,000 but not more than $10,000, made after January 27, 2009 and before February 1, 2010 pursuant to an agreement entered into after January 27, 2009.
Details: Claim up to $1,350 in tax relief for upgrades to your home done
before Feb. 1, 2010; available to everyone, not just first-time buyers;
Step 4: Get energy efficient using the ecoEnergy Retrofit program, which
was expanded in the budget
Details: Get a grant of up to $5,000 for changes to your home that add
to energy efficiency: you can also claim the home reno tax credit for
these upgrades.
The Government is on your side, mortgage rates are low and prices have come down!
