You may have heard people talk about first time home buyer qualification and wondered what this means. Well, the way we see it this could mean one of two things – they could be talking about what qualifies you to be considered a first time home buyer in order to get incentives, or they may be talking about what you need as a first time home buyer to qualify for a mortgage. So, we’re going to tell you about both these things – first, in this article, what qualifies you to be a first time home buyer and receive government incentives.
First Time Home Buyers
Usually when we talk about first time home buyers we’re talking about people who have never owned their own home before. We would think of them as being relatively young people, who are moving out of their parents’ home, or from rented accommodation, and are taking the first step to home ownership. Of course, this is the stereotype – a first time home buyer could be any age at all!
Government of Canada Incentives for First Timers
Your age doesn't make any difference in terms of the various incentives available from the government, but you do have to meet the first time home buyer rules. These can differ according to what the particular incentive is.
The Government of Canada currently offers two incentives for first time home buyers – the RRSP Home Buyers Plan, and the First Time Home Buyers Tax Credit.
Both of these plans use the same set of rules when looking at first time home buyers. You are allowed to have owned a home in the past, but at the time that you apply for either of these incentives you cannot have owned a home, or have lived in a home owned by your spouse or common-law partner, within the previous four years.
So you could have owned a home five years ago but been renting ever since. If that’s the case then you do meet the first time home buyer qualification for these plans.
Other Incentives for First Timers
You’ll find that provincial governments also have some of their own incentives for first timers too, and being provincially regulated the rules on home buyer qualification can be different. Here in Ontario for example we currently have the Land Transfer Tax Refund for First-Time Home Buyers. This incentive provides a refund of up to $2,000 on the cost of your land transfer tax. This tax is payable by anyone purchasing a home and you can apply for the refund on any newly constructed or resale home, provided you do it within 18 months of the transfer date.
The first time home buyer qualification is more cut and dried with this Government of Ontario incentive. Basically, if you have ever owned a home, or an interest in a home – anywhere in the world, at any time in your life – then you do not qualify. In addition to this, your spouse cannot have owned a home, or an interest in a home, anywhere in the world while being your spouse. So this means if your spouse did own a home, but it was before you were married, you do still meet the first time home buyer qualification.
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