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You have probably represented many first time homebuyers. First time homebuyers are in a unique position because, depending on where they buy, they could have the opportunity to benefit from significant tax breaks.
Closing costs can be challenging because there are so many of them – but fortunately for you, if you are representing a first time homebuyer, their closing costs won’t reach the level of someone who has already owned a home in Ontario.
Here is a little summary of closing costs in Ontario and first time homebuyer tax credits and rebates.
In Ontario your client will have to pay land transfer tax equal to:
Now here is where first time homebuyers get a break:
In addition to these rebates, and aside from first time homebuyers, you have some other clients who stand to benefit from land transfer exemptions as well. According to this publication by Schwartz Law, these exemptions include:
Ok, so back to first time homebuyers – in addition to all the first time homebuyer rebates that exist, there are also first time homebuyer tax credits. There is a tax credit for certain first time homebuyers that acquired a qualifying home after Jan 2009. You can find complete details here to see if your client qualifies: http://www.cra-arc.gc.ca/gncy/bdgt/2009/fqhbtc-eng.html.
We have to remember that clients, especially first time homebuyers do not know as much as you about real estate. Many times people simply miscalculate their closing costs, and when this happens the result in closing could surprise – but this is usually not the best scenario. The best way to avoid any kind of a surprise on your closings is to make the effort to know more, learn more about LTT rebates and credits. Also investing in tools that you can use to investigate applicants and properties like GeoWarehouse can be very useful.
For more about how to help your clients save big bucks on closing, or to get the most information available, please visit www.geowarehouse.ca.