First time homebuyer - definition

[EU_2010]

Hello,

I sold my place overseas and am now looking to buy in Toronto.

As a first time homebuyer, I believe that I get a little discount on the land transfer tax as well as that I can borrow up to 25k from my RRSP to use as part of my downpayment. I am aware that the latter only works if I pay those 25k back over a number of years according to the rules.

My mortgage "specialist" tells me that I am not eligible for either because I am not a first time homebuyer. It is correct that I previously purchased a home, but this was not in Canada and it would be my first time in Canada and taking advantage of the above mentioned benefits.

I think she just cannot be bothered to do the paperwork, but wanted to ask here what the rules are.

Many thanks!

 

[scylla]

Google is your friend:

http://www.fin.gov.on.ca/en/bulletins/ltt/1_2008.html

"To claim a refund, you must be at least 18 years of age, you cannot have owned a home or an interest in a home anywhere in the world, and your spouse cannot have owned a home or interest in a home, anywhere in the world while he or she was your spouse."

 

[EU_2010]

Thank you kindly for the very speedy reply, scylla.
That was a helpful link and I understand I am not eligible for a discount on the land transfer tax. That's fine.

When it comes to borrowing from the RRSP (and repaying within 15 years), I understand that there is a different definition of first home buyer:

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/participate-home-buyers-plan.html#first-timehomebuyer

"Are you a first-time home buyer?
Unless you are a person with a disability or you are helping a related person with a disability buy or build a qualifying home, you have to be a first-time home buyer to withdraw funds from your RRSP(s) to buy or build a qualifying home.

You are considered a first-time home buyer if, in the four year period, you did not occupy a home that you or your current spouse or common-law partner owned."

I lived in that home when I first bought it but moved out in 2006. I have been renting it out since and have lived in different countries in rental places, so in line with the above requirement, I have not occupied the home that I owned.

So I understand I should be able to borrow from my RRSP?

 

[Investocrat]

I believe you should be able to withdraw up to $25,000 from your RRSP based on the Home Buyers' Plan: https://www.savvynewcanadians.com/home-buyers-and-lifelong-learning-plans/

 

[sapguru]

CRA does not information about the home owned outside Canada unless you declared it during tax filing.
A friend of mine owned a mortgage free home outside North America. He qualified for first time home buyer credit and also for withdrawing from RRSP for his first home in Canada.

 

[EU_2010]

Thank you, Investocrat. Looking at the form now I understand that I should be eligible.

Hi Sapguru, yes, CRA does have the information since I declared that property on my income tax every single year. I don't qualify for first time home buyer credit and that's ok. Whether they'll find out or not, I want to do what's right as that type of thing can always catch up with you later. Not worth it.

 

[randybonns]

Originally posted by sapguru
CRA does not information about the home owned outside Canada unless you declared it during tax filing.
A friend of mine owned a mortgage free home outside North America. He qualified for first time home buyer credit and also for withdrawing from RRSP for his first home in Canada. essays.agency

Hello,

I didn't declare my property in Germany last year. And now I want to buy property in Toronto. Will I have to pay tax on the gain? Should I declare the foreign property that’s worth less than $100,000 CAD anyway? Thanks.

 

[canuck78]

Hello,

I didn't declare my property in Germany last year. And now I want to buy property in Toronto. Will I have to pay tax on the gain? Should I declare the foreign property that’s worth less than $100,000 CAD anyway? Thanks.

Yes you have to declare things like rental income or capital gains if you sell. Otherwise that is tax fraud.