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PostPosted: Thu Feb 11, 2016 12:34 pm 
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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!


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PostPosted: Thu Feb 11, 2016 6:50 pm 
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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


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PostPosted: Thu Feb 11, 2016 9:03 pm 
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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.


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PostPosted: Fri Feb 12, 2016 12:33 pm 
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The best person to ask is probably your lawyer. He or she should know what you need upon closing.


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PostPosted: Thu Feb 25, 2016 9:08 pm 
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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

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


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PostPosted: Mon Mar 07, 2016 11:45 pm 
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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


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PostPosted: Tue Mar 08, 2016 8:03 am 
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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

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


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PostPosted: Tue Mar 08, 2016 11:58 am 
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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.


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PostPosted: Tue Mar 08, 2016 12:09 pm 
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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

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


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PostPosted: Tue Mar 08, 2016 1:18 pm 
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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?


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PostPosted: Wed Mar 09, 2016 9:17 pm 
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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!


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