First, as promoted by the Canadian real Estate Association (CREA) the budget is raising the amount that first-time home buyers can withdraw from an RRSP to $25,000 from the previous $20,000.

Second, for first-time home buyers there will be a new non-refundable tax credit of $5,000 for qualified homes that close after January 27, 2009. This was also done in the USA last year (though they got a $7500 credit)

Finally, for those who already homes that need a little (ok, a lot of) touching up and to stimulte the labour markets we get a temporary Home Renovation Tax Credit (HRTC), worth 15% on home renovation projects between $1,000 and $10,000. Note that this is a short-term stimulus that applies on work performed or goods acquired after Budget Day and before Feb. 1, 2010. It’s a non-refundable tax credit, which means it can reduce taxes payable but there is no refund if your taxes are reduced below zero.

KPMG estimates the value of the First Time buyer credit at about $750 (I guess they used the lowest level 15% tax bracket tax credits are only valued at the lowest tax bracket, 15%) and as much as $1500 on a $10,000 renovation job. May not seem like much but combined that is $2250 saved after taxes if you were to buy a new home as a first time purchaser and do a kitchen renovation. That’s like getting your first month free on your mortgage! Certainly better than nothing, eh?

No related posts.