While the real estate market in the United States remains flat in most places, business is booming north of the border - particularly in the province of Ontario. With the vast majority of Canadian residents living within several hundred miles of the border with United States, there are large concentrations of residential neighborhoods with a large number of properties available. Ontario has the benefit of being home to Canada's largest city (Toronto) which simply adds to the strong real estate market.
According to numbers from the month of November, both sales and housing values continued their year-long rise last month. In November alone there were more than 7,000 residential real estate transactions recorded by the Greater Toronto Realtors Association; that represents an 11% increase over November 2010. The average price of a home involved in one of these transactions also rose at a similar rate, from CAD $437,500 to $480,400. And with interest rates as low as 3%, now is the time to buy in Ontario.
Government Programs for First Time Buyers
The Ontario government currently offers several programs for first time home buyers that meet certain qualifications. The terms of these programs vary depending on who they're targeting, but all of them are very friendly to the individual home buyers they serve. Below is a partial listing of these programs along with a very short description of each one.
- First Time Home Buyers RRSP Plan - This program provides up to $25,000 in loans for individuals who are purchasing or building a home for someone with a recognized disability. The program is designed to increase the availability of housing to Canada's disabled adult citizens. There are income requirements as well as a very specific repayment schedule that must be adhered too. In addition, applicants are not allowed to have previously owned a home anywhere in the world at any point in time.
- First Time Home Buyers Ontario Land Transfer Tax Credit - This tax credit allows for a refund of land transfer taxes in the amount up to $2,000. In essence, the credit means that individuals purchasing a home will not pay any land transfer taxes on a property valued at $227,500 or less. If a home's value is greater, the difference is taxed at a rate of 1.5%. There are certain first time home buyer restrictions that apply, including a home ownership requirement dating back five years.
- First Time Home Buyers Toronto Land Transfer Tax Rebate - Toronto offers their own land transfer tax refund similar to that offered by Ontario. Theirs provides a refund of up to $3,725 on properties valued at $400,000 or less. Like the Ontario program, Toronto's program taxes the difference on homes above $400,000 at a rate of 2%.
- Zero Down Payment Program - Ontario's zero down payment program is not technically a mortgage with no down payment; it is a rebate program for mortgages requiring a down payment of only 5%. The program reimburses that money at closing in the form of a cash rebate, making the down payment portion of the mortgage effectively a wash. If the homeowner chooses to put more than 5% down he must pay the difference out of pocket.
Use a Licensed Realtor
Just like in the U.S., Ontario residents who are purchasing a first home are advised to use a licensed real estate agent. Real estate agents know the market inside and out, which provides you several benefits. First of all, they'll have a good handle on what programs you do and do not qualify for. Second, they'll be able to represent you in negotiations with sellers in order to get you the best deal. Third, they have access to an enormous listing of houses from which you can choose. Their expert advice will help you narrow down the list to just those properties that would be suitable.
Your dreams of first time homeownership in Ontario can be a reality. So get started by contacting a real estate agent and mortgage broker today.