How the budget yesterday affects you...

Incentives! Incentives! Incentives!

As a future real estate agent/chartered accountant, I feel as if it's my duty to report to everyone the items that were offered in the most recent federal budget for real estate participants. Now, the incentives that have been offered are not for everyone. There is a targeted market for the incentives and you should speak to an accountant or a knowledgeable real estate agent for more information for your particular situation.

First, the maximum under the Home Buyer's Plan has increased from $20,000 to $25,000. This means that you may withdraw up to $25,000 tax free (repayments are required over 15 years) from your RRSP to purchase your first home. RRSP contributions reduce your taxable income, so that your taxes owing are much lower. As a result, you may be entitled to a nice refund. If done properly, you can save yourself a lot of money when purchasing your first home. You should speak to an accountant to find out the details of how to best take advantage of the tax implications of your purchase.

Now, the importance of the $5000 increase can be significant in some circumstances. The Canadian mortgage system requires mortgage insurance when purchasing a home for under a 25% down payment. This means that more of your down payment can come from taking advantage of this plan. Please plan your home purchase with a knowledgeable salesperson.

Next, there is a new credit being offered for first time home buyer's. This is separate from the home buyer's plan. You really do not have to do anything to earn this credit other than purchase your first home, and have an acccountant that knows what they are doing. This is a non-refundable credit of 15% based on $5,000. This credit is available to first-tiime home buyers after January 27, 2009.

I realize that I may have spoken a foreign language to you. Basically, the point I want to get across is that if you are thinking of purchasing a home is to think of me. I have the required knowledge to make sure the purchase is done properly, saving your hundreds and possibly thousands of $$$. I have extensive knowledge of the Ottawa market having lived in Ottawa for 25 years, and I have been working in accounting since 2004.