Tax season is here, and for some Albertans, that means a tax refund could be on the way. If you've been working towards owning your own home, a tax return can be used to turn your dreams into reality. Along with other government incentives for first time home buyers, a tax return might be the extra bit you need to invest in a new home.
Edmonton's current housing market makes buying a brand new home an affordable investment. Incomes are higher and homes are more affordable than they are in most of Canada. You can expect home values to rise in the coming years, which means building a new home is a great investment for your future.
Know How Much Your Down Payment Will Be
Many home-buyers tend to believe that a down payment for a new home is simply out of their budget. You might be surprised just how much your tax return can help when it comes to putting a down payment on a home.
A home costing $297,000 requires a minimum 5% down payment of $14,850 .Your refund might not cover the entire amount of your down payment, but it can go towards raising the necessary funds for it, helping you to achieve your goal of a new home.
Your tax refunds could be saved over a few years to help increase your financial health and purchasing power in the future. A financial advisor can help you decide what to do with your refund to grow your financial health. There are many options that you will be able to discuss with your financial professional such as putting your tax refund into a high-earning interest account, among other choices.
Why Use Your Tax Refund?
Whether you are currently renting or living at home, now is a good time to think about making the leap into home ownership. It is quite possible to lower your monthly payments by purchasing a new home. When you own your own home, making a mortgage payment builds your equity, not someone else's. Putting a down payment on a home helps increase your financial net worth.
If you already have your down payment accounted for, you can use your refund to help you save for furnishings and décor for your new home. Once you close on your purchase, you’ll need to think about other expenses such as moving, doing the required landscaping, and other related costs such as home and mortgage insurance. Using your tax return to cover these items is a great idea if you already have your down payment lined up.
Purchasing a new home is not as daunting or as scary as you may think. While it is one of the biggest investments you’ll make in your lifetime, it can also be one of the most exciting. Great fun can be had planning and building your family’s dream home, and the best part is that building a new home or moving into a quick possession doesn't have to break the bank. Using your tax refund to put towards the costs of a new home can make it that much more affordable!