OHOSP is the Ontario Home Ownership Savings Plan, which was developed to assist first-time home buyers in saving for the purchase of a home. Funds in an OHOSP account can be used towards the purchase of a qualified home in addition to funds used under the RRSP Home Buyers’ Plan (HBP). The OHOSP Plan also entitles each qualified participating spouse or common law partner to receive a tax credit for contributions of up to $2,000.00 per year to their OHOSP account. Some of the major requirements to benefit under the OHOSP Plan are as follows:
Conditions to Benefit from OHOSP:
Basics. You must be at least an 18-year-old resident of Ontario with a valid Social Insurance Number.
First-Time Buyer. You must be a first-time home buyer of a new or resale home in Ontario that is suitable for year-round occupation, and your spouse or common law partner cannot have owned a home during your marriage or since you became common law partners under the law.
Income Limits. Your net income must be less than $40,000.00 per year, and the combined income of you and your spouse or common law partner must be less than $80,000.00 per year.
Land Transfer Tax Refund Under OHOSP
There may be an added benefit to those who opened an OHOSP account before January 1, 1994. Although you still must pay land transfer tax on the closing date of your home purchase, you can apply to the Ministry of Finance afterwards for a full or partial refund of land transfer tax paid on a qualifying home. The percentage refund of land transfer tax is based on a sliding scale and will range from 100% if the purchase price was less than $150,000.00 to no refund for homes costing more than $200,000.00. You will not qualify for any refund if you opened your OHOSP after 1993 or if you claimed a land transfer tax refund at the time of closing on a newly constructed home under section 9.2 of the Land Transfer Tax Act.