There’s some excellent news in the Federal Government budget for buyers and home owners here in Toronto.

Increased Withdrawl Limit From RRSP

The best news for first time buyers is the increase in the withdrawl amount from an RRSP when buying a house or a condominium. The federal budget proposes to increase the withdrawal limit for first-time homebuyers using the Homebuyer’s Plan from $20,000 to $25,000 (per individual).

That means that a qualifying couple could use up to $50,000 total from their RRSP, tax-free, towards their down payment or closing costs.

Amounts withdrawn under the HBP must be repaid over a 15-year period, starting the second year following the year of the withdrawal.

First-Time Home Buyer’s Tax Credit

To assist buyers with the costs related to a home purchase such a legal fees, disbursements or land transfer taxes, the budget proposes a tax credit of up to $750 (15% up to maximum of $5,000)

A Perk For Existing Home Owners

To stimulate spending on home renovations, the Budget proposes a 15 per cent credit to be claimed on the portion of eligible home renovation expenditures exceeding $1,000, but not more than $10,000, meaning that the maximum tax credit that can be received is $1,350.

This will apply to eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January 27, 2009.

Credit can be claimed on eligible expenditures incurred on one or more of an individual’s eligible dwellings, including houses, cottages, or condominium units owned for personal use.