HawthorneVillager.com

Hawthorne Village (Milton) Discussion Board
It is currently Wed Aug 21, 2019 6:21 am

All times are UTC - 5 hours




Post new topic Reply to topic  [ 11 posts ] 
Author Message
PostPosted: Thu Feb 11, 2016 12:34 pm 
Offline
User avatar

Joined: Sat May 02, 2015 1:31 pm
Posts: 113
We just purchased with detached with Mattamy, closing in May of this year. As far as I'm aware there are 2 incentives for first time home buyers and I have a few questions:

1. $2K land transfer tax (do I pay this at a reduced rate when closing or is it actually an issued refund?)
2. Upto $24,000 of the provincial portion (8%) of the HST on a NEW home. (Would I be eligible for this somehow?)

Is there anything else we should look out for in closing costs as well as when we file our taxes next year after purchasing a new home?

Thanks!


Top
 Profile  
Reply with quote  
PostPosted: Thu Feb 11, 2016 6:50 pm 
Offline

Joined: Fri Dec 11, 2015 4:12 pm
Posts: 96
As far as i remember, you will see a Land transfer tax adjustment in the closing costs statement , but no benefit on the provincial portion. That will go to mattamy
Not sure if you will gain anything with your taxes


Top
 Profile  
Reply with quote  
PostPosted: Thu Feb 11, 2016 9:03 pm 
Offline

Joined: Fri Feb 05, 2016 9:13 am
Posts: 40
I think there is a "first time home buyers tax credit" which you can file on your taxes the year after you buy your house. I think it is up to $5000. Not too sure of the details. Check the Canada Revenue Agency website.


Top
 Profile  
Reply with quote  
PostPosted: Fri Feb 12, 2016 12:33 pm 
Offline

Joined: Wed Apr 15, 2015 1:57 pm
Posts: 6
The best person to ask is probably your lawyer. He or she should know what you need upon closing.


Top
 Profile  
Reply with quote  
PostPosted: Thu Feb 25, 2016 9:08 pm 
Offline
User avatar

Joined: Wed Jul 21, 2010 6:14 am
Posts: 62
Location: Milton, Canada
Hi eeninety
As a first time buyer (meaning you have never owned a home anywhere in the world) there are a number of incentives that are available:
- up to $2,000 land transfer tax which is adjusted by your lawyer in your closing costs
- up to $25,000 can be loaned from your RSP's with no tax implications if paid back over 15 years.
- as low as 5% down payment which can be gifted to you from immediate family members (parents and siblings)
- up to $750 tax credit in your next year of tax filing. (confirm with your accountant)

Your real estate laywer will be able to confirm the HST payment structure on closing.

On the financing side, there are a number of banks that offer great rates for first time buyers but be careful not to get caught in restrictive products that are expensive to make any changes during your term. Look for flexibility with good pre-payment privileges and low penalties. Right now the 5 year fixed is around 2.59%.

Kind regards

_________________
Warwick Johnston
Milton Mortgage Specialist at RBC
647-274-6029


Top
 Profile  
Reply with quote  
PostPosted: Mon Mar 07, 2016 11:45 pm 
Offline

Joined: Wed Sep 16, 2015 11:43 am
Posts: 23
Dear MortgageSource

"as low as 5% down payment which can be gifted to you from immediate family members (parents and siblings)"

Could you please kindly explain this little bit in more detail?

The reason I am asking is that we are a first time home buyer and our family is planning to send us between 5 to 10 % of the mortgage down payment and this would come via a wire transfer from overseas into our bank account. I am wondering will this cause any issues in terms of tax purposes etc? Should our family mention prior to wire transfer that it is a "GIFT" for first home etc?

Thank you


Top
 Profile  
Reply with quote  
PostPosted: Tue Mar 08, 2016 8:03 am 
Offline
User avatar

Joined: Wed Jul 21, 2010 6:14 am
Posts: 62
Location: Milton, Canada
Hi gs1905, please call me Warwick

Your parents would need to sign a letter provided by the bank which states the funds are a gift with no repayment required. The money would need to be in your bank account at least 15 days before closing your home purchase. There is no tax implication here in Canada, as it is a gift from your parents.

Let me know if any other questions

_________________
Warwick Johnston
Milton Mortgage Specialist at RBC
647-274-6029


Top
 Profile  
Reply with quote  
PostPosted: Tue Mar 08, 2016 11:58 am 
Offline
User avatar

Joined: Sat May 02, 2015 1:31 pm
Posts: 113
MortgageSource wrote:
Hi gs1905, please call me Warwick

Your parents would need to sign a letter provided by the bank which states the funds are a gift with no repayment required. The money would need to be in your bank account at least 15 days before closing your home purchase. There is no tax implication here in Canada, as it is a gift from your parents.

Let me know if any other questions


Hi, thanks for the help.

I'm paying the 20%, but my parents are paying the closing costs for us (are there tax implications on that? do we need to get a letter etc.). Hypothetically, if they were to transfer me funds and I pay for it through my own bank account, that doesn't count as income so how will the CRA even know?

Would it be safer for them to pay the closing costs directly (in their name) or transfer funds to me and I do it in my name.

Thanks again - this is very helpful.


Top
 Profile  
Reply with quote  
PostPosted: Tue Mar 08, 2016 12:09 pm 
Offline
User avatar

Joined: Wed Jul 21, 2010 6:14 am
Posts: 62
Location: Milton, Canada
Hi eeninety

In terms of the Money Laundering Act, Banks have to prove all source of funds. The closing costs will need to be covered by a gift letter from your parents and paid into your bank account at least 15 days before closing. This would not be regarded as income by CRA. One thing I did not mention to gs1905 is that some banks will request a copy of the wire transfer transaction and some banks will not allow funds from a few countries.

Typically banks request 3 months bank statements showing that you have owned money for at least that time. If your parents send you the money at least 3 months before where their deposit is not shown on the 3 month statements, then you would not need the gift letter.

Let me know if any other questions

_________________
Warwick Johnston
Milton Mortgage Specialist at RBC
647-274-6029


Top
 Profile  
Reply with quote  
PostPosted: Tue Mar 08, 2016 1:18 pm 
Offline
User avatar

Joined: Sat May 02, 2015 1:31 pm
Posts: 113
MortgageSource wrote:
Hi eeninety

In terms of the Money Laundering Act, Banks have to prove all source of funds. The closing costs will need to be covered by a gift letter from your parents and paid into your bank account at least 15 days before closing. This would not be regarded as income by CRA. One thing I did not mention to gs1905 is that some banks will request a copy of the wire transfer transaction and some banks will not allow funds from a few countries.

Typically banks request 3 months bank statements showing that you have owned money for at least that time. If your parents send you the money at least 3 months before where their deposit is not shown on the 3 month statements, then you would not need the gift letter.

Let me know if any other questions



Good to know - I never would have thought that.. is there an official gift letter form? Do we have to give it to the bank or just obtain a copy of it for our own records? If I were to take out a small loan ($5k) from our parents to top up the 20% down but will be paid back within 60 days, would we need a letter for that as well?


Top
 Profile  
Reply with quote  
PostPosted: Wed Mar 09, 2016 9:17 pm 
Offline

Joined: Wed Sep 16, 2015 11:43 am
Posts: 23
MortgageSource wrote:
Hi gs1905, please call me Warwick

Your parents would need to sign a letter provided by the bank which states the funds are a gift with no repayment required. The money would need to be in your bank account at least 15 days before closing your home purchase. There is no tax implication here in Canada, as it is a gift from your parents.

Let me know if any other questions


Thank you Warwick for your kind answer.

"sign a letter provided by the bank which states the funds are a gift with no repayment required"

Are you talking about the bank here in Canada? Just would like to make sure which bank would provide that letter? The sender`s bank or here in Canada receiver`s bank?
Sibling`s are okay with this I guess does not have to the parents that sending it?

Thank you again!


Top
 Profile  
Reply with quote  
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 11 posts ] 

All times are UTC - 5 hours


Who is online

Users browsing this forum: No registered users and 1 guest


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum
You cannot post attachments in this forum

Search for:
Jump to:  
Powered by phpBB® Forum Software © phpBB Group
[ Time : 0.078s | 13 Queries | GZIP : Off ]