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The Ontario government created the OHOSP (Ontario Home Ownership Savings Plan) program to encourage first-time homebuyers into the real estate market. The Plan may be opened at any financial institution, including the Province of Ontario Savings Office. It is a savings account, earning interest at the rate the institution is offering, and since the OHOSP is not a tax shelter, any interest earned is taxable.
Depending on your income, a maximum annual contribution to the OHOSP plan could give you an Ontario Tax Credit of up to $500 ($1,000 per couple) on your income tax return. To qualify, your net income must not exceed $40,000 ($80,000 per couple). There is no limit to how much you contribute, but the credit is based on a maximum contribution of $2,000 ($4,000 per couple) per year. You may make contributions for up to 5 consecutive years, and once it's closed, you must purchase within 2 years after that.
Please note that the OHOSP program is proposed to end on December 31, 2005 as per the May 18, 2004 Ontario Budget. For more information, please click here.
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