It’s no secret that Canada’s real estate is feeling the effects of high inflation and the Bank of Canada’s tenth successive interest rate hike.
According to the Canadian Real Estate Association (CREA), the average home price in June 2023 was $583,288, a 17.6% drop from the year prior. National home sales were down by 2.5% on a month-over-month basis in June of this year, as many Canadians are on the fence about purchasing a home only to face high and rising interest on their mortgage.
In a high mortgage rate environment, prospective buyers can use all the help they can get. Fortunately, the Government of Canada offers a number of homebuyer assistance programs that can make the financial pain of that huge purchase a little easier to handle.
For Welland homebuyers, navigating the real estate market and exploring various options can be both thrilling and overwhelming. However, fret not! In this blog, we'll take a deep dive into how you can unlock financial assistance from government schemes and grants, making your dream of owning a home in Welland a reality.
First-Time Home Buyer Incentive
What is the one of good things about being a first-time homebuyer? There are a few programs curated to assist you, like the First-Time Home Buyer Incentive. This incentive gives you 5% or 10% of the home’s purchase price toward a down payment. At last, you have a lower carrying cost on your mortgage.
You’re eligible for the incentive only if, you’re a first-time homebuyer in Canada. You do have to pay the incentive back, however, when you sell your house, or within 25 years of purchasing it — whichever comes first.
Home Buyers' Amount
One of the major benefits of being a first-time buyer is that when tax season comes around, you can apply for a fair and healthy deduction. The Home Buyers’ Amount — also called the first-time homebuyers’ tax credit — offers first-time home buyers in Canada to claim a $10,000 tax credit for the purchase of a qualifying home, which includes existing homes and also those under construction.
Home Buyers' Plan (HBP)
If you have a Registered Retirement Savings Plan (RRSP) and luckily you are a first-time home buyer, you can dip into it tax-free for the house for sale in Welland via the Home Buyers' Plan. Currently, the withdrawal limit to $35,000, and it’s applicable to withdrawals made about March 19, 2019. But be aware, you have 15 years to return the withdrawn funds.
GST/HST New Housing Rebate
People, who are buying a home in a new building, or even building their own home in Welland in 2022, can enjoy the benefit of the GST/HST New Housing Rebate. The rebate will cover some of the GST or the federal part of the HST you paid.
You can simply apply for the rebate by filling out the New Housing Rebate Application for Houses Purchased from a Builder and filing it with Revenue Canada. Residents of Ontario also need to fill out the Ontario Rebate Schedule. If you are building your own home in Welland, you’ll also need to submit a construction summary worksheet. Additionally, you have to include supporting documents if a vendor didn’t charge you HST or GST on your bill.
Other Down Payment Assistance Programs
Maybe you don’t qualify for one or more of Canada’s home-buying programs because you’re earning too low. The good news is that you still have plenty of options. Most provinces, and even some municipalities, have some kind of down payment assistance.
While Canada’s home-buying programs aren’t technically known as home-buying grants, per se, they can magnificently help lower the amount you’ll pay for your home in Welland. Make sure you consider all homeownership assistance programs in your province to ensure you’re not leaving any money on the table when it comes time to buy a home.
Congratulations, brave Welland homebuyers! You've made it through the labyrinth of government schemes and grants. You are now armed with the knowledge to unlock financial assistance and embark on the journey of homeownership. Remember, it's not just about buying a house; it's about finding your home sweet home in Welland. So, go forth, explore, and make your dream a reality!
And always remember, if things get too overwhelming, take a break and have a laugh. After all, a smile is the best down payment in life!