Ditching the landlord and taking the leap into the realm of home ownership? While it can be frightening, consumers who have the resources to buy a home shouldn’t shy away from this type of financial decision. But you must be prepared and you much have the money to do so, or you may incur years of unavoidable debt.
With the help of your Realtor® or real estate representative, and some research, buying a home for the first time will be less daunting and complicated. The best thing you should do is to not rush into a decision and to prepare well ahead of time.
Here are some tips, guidelines and advice for those who are thinking of buying a home:
- Knowing that you’re ready: Before you even look at homes online or in the newspaper, make sure that you have the ability to buy a home. Check your finances, your credit score and budget accordingly. Ask your real estate professional or your representative at your bank to check over you financial situation to determine whether or not you’re ready. If you aren’t or if you feel like you aren’t, start saving what you can. Even if you choose to buy a home, you’re going to have to cut your spending considerably.
- Know how much you’re going to spend before you look: After you have found out that you’re ready to buy a home, it’s time to budget yourself. Set up a meeting with a local Mortgage Specialist or Mortgage Broker. Contact UsIf you would like recommendations on trusted professionals from our network of professionals. Determine how much you’re willing to spend to purchase a new home, and calculate what is needed for down-payments – ensure you ask as many questions as you need to, ensuring you’re comfortable with your budgetary commitments.
- Finding the right Real Estate Representative: We have helped many first time home buyers find a perfect first home for their needs. It is our joy and strength to educate first time buyers on the ins and outs of home ownership including the process of looking at a home for the first time, offering on the home and working through and more importantly, understanding the Agreement of Purchase and Sale paperwork, all the way through negotiations, conditions, and finalization of the purchase. We work with your best interests in mind, protecting your needs, and ensuring you are fully educated throughout the process.
- Knowing what you need: Make a list. What are your ‘must haves’, and what features in a home are those you would prefer to have, but do not necessarily need. Once you acquire our assistance, we will be sure to work through this list with you, ensuring we understand what it is you are looking for to the fullest, while also making sure you are on track and realistic based on your budget and timeframe, and current market conditions depending on where you are looking to buy. Our experience, expertise, and market knowledge will be fundamental assets throughout this important process!
- First Time Home Buyers Land Transfer Tax Refund: When you buy land or an interest in land in Ontario, you pay land transfer tax. First time homebuyers of an eligible home may be eligible for a refund of all or part of the tax.
- Getting a Lawyer/Notary: You will need to hire a lawyer to work toward closing the transaction when the time comes. In many instances, a Buyer may choose to have their lawyer review the Agreement of Purchase and Sale as a condition to their offer, before it becomes firm and binding. We can discuss this in full with you when the time comes, and have local, highly recommended professionals in our trusted network we can refer to you.
- Don’t forget about those closing costs: After purchasing a home, you may be faced with “extra charges” on closing. Understand the various fees that you’ll have to pay before the close of the sale so you could save accordingly. These fees can include legal costs, land transfer taxes, disbursements and many others. Our team, along with your Mortgage Specialist and Lawyer can ensure you are fully aware of these associated costs so there are no surprises on, or close to day of closing.
How much money could I receive?
The maximum amount of the refund is $2,000.
For example:
| Cost of Home | Tax Payable | Tax Refund | Net Tax Payable |
| $100,000 | $725 | $725 | $0 |
| $200,000 | $1,725 | $1,725 | $0 |
| $300,000 | $2,975 | $2,000 | $975 |
If the refund is claimed at time of registration, it may offset the land transfer tax ordinarily payable. If not claimed at registration, the refund may be claimed directly from the Ministry of Finance, within 18 months after the transfer. No interest is paid on this refund.
Do I qualify?
To get a refund of land transfer tax, you:
- must be at least 18 years old
- must occupy the home as your principal residence within nine months of the date of transfer
- cannot have ever owned an eligible home, or an interest in an eligible home, anywhere in the world, and
- if you entered into an agreement of purchase and sale before December 14, 2007, the eligible home must be newly constructed and you must be eligible for the Tarion New Home Warranty.
If you have a spouse, your spouse cannot have owned an eligible home, or an interest in an eligible home, anywhere in the world while being your spouse.
You must apply for a refund within 18 months after the date of the transfer.
Contact Us for more information.
Buying a home should be an exciting period for you, and while it seems complicated and difficult at first, prevailing through the challenges isn’t as hard as you think. With our help, you’ll make a great purchasing decision and be settled into a new property to call home.