By now we all know the federal budget for 2009 has been released and there are some positive initiatives for the real estate industry. Two initiatives specifically referenced first time homebuyers and so here are some key points which should be communicated to this target market to help them enter the real estate market.
1. Previously, Canadian first time homebuyers could use up to $20,000 of RRSP funds towards the purchase of a home. The changes to the budget now allow homebuyers to use up to $25,000 of RRSP funds which can translate into a $50,000 downpayment for a couple that both have the maximum funds available. Funds need to be repaid within 15 years and must have been invested at least 90 days prior to withdrawl.
2. The first time homebuyers tax credit uses a $5000 income tax credit to translate into a maximum of $750 of tax relief which can be used towards covering the cost of legal and bank fees.
3. (For British Columbia)…First time homebuyers in BC can be exempt from paying Property Transfer Taxes (PTT) upon their purchase provided their home is less than $425,000 (there is a partial credit for homes between $425,000 and $450,000), they are a Canadian citizen and have lived in BC for at least 12 months, and will make the home their primary residence. This translates into thousands of dollars in savings!
4. For those purchasing newly constructed homes there is also a GST New Housing Rebate that can be applied to recoup up to $6300 of GST fees. The home must be a primary residence and under $450,000 to be elegible.
The tools listed above are obviously relevant to Canada and most specifically to BC but regardless of where you operate as a salesperson or organization, it is important to stay current and communicate to your prospects. It is amazing how many prospects who are actively looking for homes are not aware of the government tools available to them. Although salespeople should encourage prospects to speak to their lending institutions or lawyers, they need to make their prospects aware of the opportunities and likely it will also help to instill confidence in the buyer knowing that they are clearly dealing with a knowlegeable salesperson.
At MAC, our NEW HOME CONSULTANTS are trained to help educate these future home owners on such programs and they work directly with the mortgage companies to ensure maximim benefit for the buyer.
Happy selling,
Cameron McNeill
