Widespread home ownership is in the public interest -- a home is a great source of security in the event of an emergency and allows families a large measure of financial independence. Public policy at both the federal and provincial level in Ontario encourages home ownership through a number of programs and incentives. The following is a list of these programs.

High-Ratio Mortgages: Typically, a home buyer must make a down payment of about 20-25% of the value of the property being purchased. A mortgage covers the remaining 75-80% of the value of the home. Since the average home price in Toronto is close to $400,000, the average down payment is about $100,000. Although many first-time purchasers opt for a less expensive first home, a large down payment can be a huge obstacle. To make it easier to buy your first home, first-time buyers can put down as little as 5% towards the purchase of a home and borrow the remaining 95%. A mortgage with such a small down payment is called a high-ratio mortgage. The law requires that borrowers obtain mortgage loan insurance for high-ratio mortgages (any mortgage where the down payment is less than 20%). Mortgage loan insurance protects the lender in the event that the borrower defaults.

Land Transfer Tax Relief: A first-time buyer of residential property is eligible for a rebate of Ontario Land Transfer Tax on the purchase of a new or resale home. The maximum rebate is $2,000. This is equivalent to the Ontario Land Transfer Tax on a home valued at $227,500. If buying a home in Toronto, first-time buyers are eligible for a full Toronto Land Transfer Tax rebate (maximum $3,725). This is equivalent to the Toronto Land Transfer Tax on a home valued at $400,000. To be eligible for these rebates, a buyer must be at least 18 years old and must occupy the home as his or her principal residence within nine months of the date of closing. Also, the buyer must not have previously owned a home or have had any ownership interest in a home anywhere in the world. If the purchaser has a spouse, the spouse must not have had any ownership interest in a home anywhere in the world while a spouse of the buyer. If the spouse of a homebuyer owned an interested in a home before becoming the purchaser's spouse, the purchaser may be eligible for some rebate.

RRSP Home Buyers’ Plan (HBP): Under this plan, first-time home buyers are permitted to withdraw $25,000 from their RRSP on a tax free basis if applied towards the purchase of a new or resale home. If you have a spouse who is also a first-time home buyer, he or she may be able to withdraw an additional $25,000 from their own RRSP. In order to take advantage of this incentive, you must be a resident of Canada and intend to occupy the home within one year of closing. Under the HBP, you can qualify as a first-time buyer if you have not owned a home that you occupied during the period from January 1st of the fourth year before the year of the withdrawal from your RRSP and ending 31 days before the withdrawal (between 4 and 5 years). A buyer who withdraws from his or her RRSP under the HBP has 15 years to repay the withdrawn amount (1/15th of the amount per year). There are many terms and conditions that a buyer must meet to qualify for the HBP. This information can be found at the HPB webpage, which is published by the Canada Revenue Agency.

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