|$10,000 First Time Home Buyer Bonus|
|Friday March 16, 2012 03:29 PM|
Federal Grant :
•First, this is a $5,000 income tax credit claimed when filing your annual personal tax return
•The $5,000 is applied as a tax credit at the basic personal federal tax rate of 15%
•Accordingly the effective value of the grant is $750
•The $750 value is applied regardless of the income of the buyer
•This grant is available to first time buyers, but the home need not be a brand new home
BC Grant :
•The BC Grant is a Bonus for first time buyers in BC
•The Bonus is 5% of the purchase price, subject to a maximum of $10,000
•The home must be a new home to which HST is applied
•The Bonus is scaled back based on income of the purchasers
•The purchaser can apply immediately after completion of the purchase via an application form that will soon be available on the BC Government web sites
|Early Payout Penalties for Mortgages|
|Friday March 16, 2012 03:25 PM|
The government said in its 2010 budget that it would standardize the calculation and disclosure of mortgage penalties. The measures just announced don’t address the fact that mortgage lenders use different methods to calculate penalties, some of which hit borrowers harder than others. But they do require banks to:
•Annually show customers how they can pay off their mortgages faster without incurring prepayment charges.
•Provide online mortgage penalty calculators.
•Offer a toll-free phone line that customers can call to talk to bank staff about mortgage prepayment penalties and find out the actual charge that would apply.
•Disclose the details of how actual mortgage prepayment penalties are calculated (example: whether three months’ interest is being used, or a calculation called the interest rate differential that looks at how much interest a bank is losing out on if you break your mortgage).
These rules will be introduced over the next six to 12 months or so, and they apply specifically to new mortgages.
The Department of Finance says the measures will be applied to existing mortgages “where it is feasible to do so.” Business mortgages are not covered.