First-time home buyers get a (relatively) sweet deal in the new Conservative budget

Let's just get one thing out of the way first- we know people were getting excited when it was leaked that there would be massive tax cuts for most people. But let's be realistic. We weren't surprised that they were tiny- we can't afford bigger ones. The tax savings to be gained by increasing the bracket amounts are paltry - a hundred bucks or so at best for most people.

However, we thought there was enough for first time home buyers to like about this budget.

First timers will be able to withdraw up to $25,000 from their RRSPs to go towards a home purchase, up $5,000. For a young couple, that extra $10,000 is a huge deal- it means having a bigger down payment, saving them thousands in mortgage interest payments, or it can go towards furnishing their new home and paying for it this year, not in 2010 or whatever furniture stores advertise these days.

Not to mention up to $750 in tax credit savings.

There is also some people who qualify for a home renovation tax credit, including new home owners. More on that in another post to come. The amounts are small, but they could be helpful when doing smaller reno jobs, like bringing an older bathroom up to date (goodbye white melamine!) or investing in green retrofitting of older homes (ie. new windows.)

It would have been very sweet to see interest payments tax deductible- the ultimate tax break for home owners, but we guess that would be pushing it. ;-)

Sources: The Montreal Gazette, the Government of Canada, René Vézina blog in Les Affaires, the Financial Post