New Ontario Initiative Could Help First Time Homebuyers in Mississauga
When it comes to real estate and affordability, the news is almost never good—especially for first time homebuyers.
Recently, the federal government announced that all new mortgage borrowers with downpayments of less than 20 per cent who are seeking mortgage insurance (first time buyers often find themselves in this situation) will have to qualify at higher interest rates. While that policy may discourage some new buyers, there is a silver lining coming down from the Ontario brass.
According to the Ontario government, the province will ease the burden on first time buyers through a proposal to double the maximum land transfer tax refund for eligible buyers to $4,000. The increase would be effective Jan. 1, 2017 and it will mean that eligible homebuyers in Ontario will pay no land transfer tax on the first $368,000 of the cost of their first home.
According to the government, more than half of first-time homebuyers in Ontario would pay no land transfer tax on the purchase of their first home with the double refund.
Aside from the tax refund, there are a few other policies coming down the chute. The government is also freezing property taxes on apartment buildings while it evaluates how the high property tax burden affects rental market affordability. Believe it or not, apartments are typically burdened much more heavily by property taxes than other residential properties such as condos.
The Ontario government is also looking to modernize the land transfer tax. For those who don't know, land transfer tax is typically based on a home's purchase price. Because of that, the government is proposing to modernize the rates to better reflect the current real estate market. This will hike rates for some buyers, but the government says the increases will impact "less than one per cent of purchasers of homes in Ontario." Revenue generated from increased rates will be used to fund the enhancements to the first-time homebuyer's refund.
You can learn more about the proposed rate hikes here.
While the refund might not seem huge, getting money back is always welcome—especially after spending a significant sum on a home.
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