Wendy Betts

Cost-saving programs for Homebuyers and Homeowners

Wise real estate decisions are made when you have a clear understanding of your personal financial circumstance. When assessing your own situation, it is important to know that there is also a broad range of cost-saving programs out there designed to help with a down-payment or the annual costs related to homeownership. Here are a few examples of the many government initiatives designed to ease the financial pressures on homebuyers and homeowners.

Home Buyers' Plan

(RRSPs for your down-payment)

The federal government’s Home Buyers' Plan now lets qualifying home buyers use up to $25,000 (increased from $20,000) of their RRSP to buy a home. Couples can use up to $50,000 (increased from $40,000).

The home must be a principal residence, the home buyers must not have owned a home within the past five years, and the loan must be repaid within 15 years. We estimate that a couple buying a townhome in Metro Vancouver with a benchmark price of $423,338 will save $7,448 on their mortgage (at 5 per cent rate amortized over 25 years) as a result of this increase.

Questions on this program may be directed to the Canada Revenue Agency at: 1.800.959.8281.

First-Time Home Buyers' Tax Credit

This new federal tax credit program provides up to $750 in tax relief to qualifying buyers for costs associated with buying a first home, including legal fees and land transfer taxes. Beginning on your 2009 personal income tax return, a new line will be incorporated to allow you to claim the credit.

Home Renovation Tax Credit

This new provision lets homeowners qualify for a federal income tax credit of up to $1,350 for home improvement projects. This temporary program provides an income tax credit on eligible home renovation expenses for work performed or goods bought after January 27, 2009 and before February 1, 2010. Homeowners can claim a tax credit for 15 per cent of renovation expenses between $1,000 and $10,000 for a maximum credit of $1,350. There is no tax credit for less than $1,000. New additions, decks, carpeting, floorings, heating systems and landscaping qualify. Furniture, appliances, tools and maintenance contracts do not qualify. Note: there are no forms. Beginning with the 2009 personal income tax return, a new line will be incorporated to allow renovators to claim the credit. If you intend to use this tax credit, be sure to save your invoices and receipts.

Energy Retrofit Rebates and Incentives

The federal ecoENERGY Retrofit Program gives property owners grants of up to $5,000 to offset the costs of making energy-efficiency improvements. For information go to the Natural Resources

Canada web site http://oee.nrcan.gc.ca/corporate/retrofit-summary.cfm where there is a list of retrofit grants and incentives for residential property owners, commercial and institutional buildings and industrial facilities. The provincial government is extending PST exemptions until March 31, 2011 for:

• ENERGY STAR residential heating equipment;

• ENERGY STAR qualified windows, doors and skylights

BC Home Owner Grant

Reduces property taxes by up to $570 on properties assessed up to $950,000 and continues on asliding scale up to $1,064,000. Provides an additional $275 for a maximum of $845 for seniors, veterans and the disabled on homes assessed up to $950,000, and is reduced on a sliding scale on homes valued up to $1,119,000.

 Property Transfer Tax and rebate

Home buyers in BC pay a provincial Property Transfer Tax when they buy a home. The tax ischarged at a rate of 1 per cent on the first $200,000 of the purchase price and 2 per cent on the remainder. First-time home buyers may qualify for a full exemption on a home with a maximum purchase price of $425,000 or a partial exemption on a home priced to $450,000. Buyers can’t have previously owned a home anywhere in the world. Details on all of these programs and many more helpful tips are available on www.rebgv.org.