{"id":9997,"date":"2017-02-14T02:00:40","date_gmt":"2017-02-14T07:00:40","guid":{"rendered":"http:\/\/www.zoocasa.com\/blog\/?p=9997"},"modified":"2022-09-26T00:57:55","modified_gmt":"2022-09-26T04:57:55","slug":"is-it-financially-sweeter-to-buy-a-home-as-a-couple","status":"publish","type":"post","link":"https:\/\/www.zoocasa.com\/blog\/is-it-financially-sweeter-to-buy-a-home-as-a-couple\/","title":{"rendered":"Is It Financially Sweeter to Buy a Home as a Couple?"},"content":{"rendered":"

Buying a home isn\u2019t for the financially faint of heart – and as prices rise, it\u2019s becoming harder to purchase real estate solo.While the majority of first-time buyers tend to purchase in pairs (a 2015 study by Genworth Guaranty found 62% of buyers do so with a spouse or long-term partner), it can take even more than two to tango to get ahead in<\/span> real estate markets like Toronto<\/span><\/a> and Vancouver, as co-buying in groups rises in popularity.<\/span><\/p>\n

Related Read: <\/b>The Pros and Cons of Co-Buying a Home<\/b><\/a><\/p>\n

While splitting the cost of a home can bring your wallet relief, though, it can complicate some of the tax credits and rebates you can expect to receive as a first-time buyer. Here\u2019s a look at where buying as a couple (romantic or otherwise) can boost your affordability, and where you\u2019ll benefit when buying by yourself.<\/span><\/p>\n

Mortgages: Double the Scrutiny<\/h2>\n

While having two sources of income can be a great advantage when qualifying for a mortgage, if one applicant has less-than-stellar credit or a hefty debt-to-income ratio, that may not score you a better rate. It\u2019s important to confer closely with your mortgage broker or specialist to determine whether both buyers should apply as loan applicants. In some cases, incurring a much higher interest rate as a result of one partner\u2019s financial situation could be more detrimental than qualifying for a smaller amount at a very competitive rate based on just the other\u2019s. Just another reason to have the \u201cmoney talk\u201d before taking your love to the home ownership level.<\/span><\/p>\n

The Home Buyers\u2019 Plan: Two Nesteggs Are Better Than One<\/h2>\n

The Home Buyers\u2019 Plan, a federal program that allows first-time buyers to withdraw up to $25,000 from their RRSPs tax-free for the purchase of their home, can be doubly nice for two; a total of $50,000 of savings can be withdrawn from partners (assuming both have saved fastidiously and have the funds), to be paid back over a 15-year period. A solo first-time buyer, by contrast, will have only their own nest egg to tuck into. <\/span><\/p>\n

However, both buyers must be first-timers in order to be eligible to access up to $50,000 – should one have owned property anywhere else in the world prior, they no longer qualify for their half of the program.<\/span><\/p>\n

The First-Time Home Buyers\u2019 Tax Credit: Sharing is Caring<\/h2>\n

The First-Time Home Buyers\u2019 Tax Credit (Line 369) allows first-time buyers to claim $5,000 of their home purchase on their taxes which, when taxed at the minimum rate of 15%, equals a $750 credit. It\u2019s a nice little perk designed to offset closing costs for buyers, but can only be claimed once per property – meaning you can split it with your sweetheart, but only up to the $750 total. Should one buyer not qualify as a first-timer though, the other partner can claim up to the full amount on their taxes – an amount a solo first-timer would receive in full, regardless.<\/span><\/p>\n

Land Transfer Tax Rebates: \u201cIt\u2019s Complicated\u201d<\/h2>\n

Depending on which province you reside in – for example, in Ontario – you may be required to pay land transfer tax on the purchase of your home. It\u2019s considered one of the more loathsome closing costs,<\/span> taxing buyers on a sliding scale<\/span><\/a> depending on the total purchase price:<\/span><\/p>\n