Getting into the housing market in Manitoba can be complex at the best of times, but buying your first home tends to make things even more complicated. You've no doubt got hundreds of questions about how to save a down payment, whom to trust with your mortgage, and what rebates you might be eligible for as a first-time homebuyer.
At Ratehub.ca our aim is to make the process as simple as possible. On this page, you'll find the most important things you'll need to know about buying your first home in Manitoba. First-time homebuyer regulations are generally set on a provincial or municipal level, so it's good to get information specific to where you live.
Across Canada, most provincial first-time homebuyer programs are a rebate of the land transfer taxes that you are required to pay in your home province. Manitoba has a land transfer tax but doesn't have a rebate for first-time homebuyers.
This might seem like a raw deal for Manitoba first-time homebuyers, but that might not be the best way to think about it. While Manitoba land transfer tax rates are comparable with other provinces, property prices across Manitoba are significantly lower than they are in some of Canada's big cities like Toronto, Vancouver, and Montreal.
So, while there isn't a rebate available to Manitoba first-time homebuyers to cover this tax, the actual taxed amount is likely to be relatively small in comparison to the taxes you might pay in a more populous province.
Manitoba land title tax
In provinces like Ontario, Quebec, and British Columbia, land transfer taxes can be as much as 5% of the purchase price. Land title taxes in Manitoba are comparable with other provinces, but are still on the lower end, capping out at 2.0%.
Manitoba land title taxes are based on the purchase price of the home you buy, plus a $70 registration fee payable on all transactions. The rates are listed in the table below.
Marginal Tax rate
|On the first $30,000||No tax|
|$30,001 to $90,000||0.50%|
|$90,001 to $150,000||1.00%|
|$150,001 to $200,000||1.50%|
|On amounts above $200,000||2.00%|
Let's say you purchased a home that cost $300,000 in Winnipeg. Below are the simplified calculations to work out your land transfer tax:
- On the first $30,000: $0
- $30,001 to $90,000: $300
- $90,001 to $150,000: $600
- $150,001 to $200,000: $750
- $200,000 to $300,000: $2,000
Including the flat $70 registration fee, your total Land Transfer Tax would be $3,720. To calculate the Land Transfer Tax on other purchase prices, you can use our Manitoba Land Transfer Tax Calculator.
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While most first-time homebuyer grants and tax rebates exist at the provincial level, there are some programs that are federally administered. This means that they're available to first-time homebuyers in every province and every city, including in Manitoba.
Here are a few of the main federal programs that you should look into when buying your first home. Keep in mind that they may have different eligibility criteria than the programs in Manitoba do, so be sure to look into the details.
First-Time Home Buyers Tax Credit
The First-Time Home Buyers Tax Credit is a pretty straightforward program for people who've bought their first home. It's a tax credit of up to $750 that can be claimed on your tax return in the year you purchased the home.
The First-Time Home Buyers tax credit is also available to Canadian homebuyers with a disability, even if it isn't their first home. If this might apply to you, it's worth speaking to a mortgage broker or your mortgage provider about it.
RRSP Home Buyers' Plan
The RRSP Home Buyers' Plan lets you borrow up to $35,000 from your RRSP (registered retirement savings plan) in order to fund the downpayment of your first home. For couples, the maximum amount you can borrow is $70,000.
You will need to pay this amount back over the next 15 years. If you fail to pay it back, you'll be charged income tax on the unpaid amount (your RRSP deposits should already have been tax-deferred).
GST/HST New Housing Rebate
If you have purchased a new, off-the-plan, or substantially renovated property, you will likely need to pay GST or HST on it, on top of your other closing costs. The GST/HST New Housing Rebate aims to make this less of a burden for first-time homebuyers.
This rebate is equal to 36% of the GST paid on the purchase. You'll receive the full rebate if your home has a market value of $350,000 or less. For homes priced between $350,000 and $450,000, you'll receive a partial rebate.
Mortgage rates for first-time homebuyers
As long as you have good credit and a sufficient down payment, you will likely be able to qualify for the best mortgage rates in the market, even if you’re a first-time homebuyer. It’s not necessary to apply for a mortgage from the financial institution you do your everyday banking with. In fact, you may be able to get better rates by shopping around. Many first-time homebuyers use mortgage brokers to help facilitate the mortgage application process.compare rates today
As a first-time homebuyer in Manitoba, finding and qualifying for the best mortgage rates in Canada might seem like a daunting task. However, it's less effort than you might assume, especially thanks to modern tools like the ones on Ratehub.ca.
Below are a couple of tips, tricks, and tools that can help you find and be approved for the lowest mortgage rates in Canada, even as a first-time homebuyer.
Comparing rates from multiple lenders
Mortgage rates will always vary between different mortgage providers, even on the exact same product! This is because every lender has a different marketing and monetization strategy, and is comfortable with different levels of risk. For example, if you are a particularly risky borrower, the mortgage providers offering the lowest rates may not approve your mortgage, forcing you to borrow from a lender with higher rates.
The best way to make sure you're getting the best rate that you're able to be approved for is to compare quotes from multiple mortgage providers. We can help you do this - just click "let's get started" at the top of this page to begin the process. It's totally free to use and could help you save a lot of money by finding a lower rate.
Using a mortgage payment and affordability calculator
It's important to know how much you can afford. Setting your sights too high will make it harder to be approved for a mortgage, and can end in disappointment. Most first-time homebuyers will have some limitations on their budget, so it's a good idea to understand how much you can actually afford to borrow.
Our mortgage calculators can help you understand how much your regular payments are likely to be (payment calculator), how large a mortgage you can afford to borrow (affordability calculator), as well as whether it's worth refinancing your mortgage (refinance and penalty calculators). The first two are most useful for first-time homebuyers - use the links below to get started.
Saving a larger down payment
Saving a larger down payment will - assuming you were to buy the same home - reduce the overall size of your mortgage. This is good for a couple of reasons. Firstly, it will result in you paying less interest over the course of your mortgage, which can save you thousands of dollars.
Secondly, it makes it easier to qualify for a mortgage. Your lender will look at the ratio between your income and your expected mortgage payments (along with your existing debt payments) in order to decide whether to approve your mortgage application. A lower overall mortgage amount will make this calculation more favorable for you.
Paying off your existing debts
As mentioned above, your mortgage provider will consider your income against your expected mortgage payments when deciding whether to approve your mortgage application. It will also consider your existing debt payment obligations. Your lender needs to be confident that you'll be able to make your mortgage payments, even after paying off your other debts.
To increase the odds of passing this test, it's a good idea to pay off as many of your existing debts as possible. This includes student loans, credit cards, auto loans, and any other outstanding debt that you may be carrying.
Increase your credit score
Increasing your credit score is another way to help you get a lower mortgage rate. If you have good credit (at least 600) you should be able to get a mortgage approved from most of Canada's larger mortgage providers, which are the ones that tend to offer the lowest mortgage rates.
If you have a score of less than 600, you may be forced to get a mortgage from a "B-lender" or a private mortgage provider. These lenders take on risker borrowers, but they charge a much higher mortgage rate. If your credit score isn't good, it could be worth improving it before you apply for a mortgage.
Whether you need a mortgage, credit card, savings account, or insurance coverage, we help you find and compare the best financial products for your specific needs.
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