Canada’s First-Time Home Buyer Programs Explained

Canada’s First-Time Home Buyer Programs Explained Featured

For first-time buyers especially, scraping together even the minimum down payment required to purchase a home in Canada can be difficult. But the good news is, there are several programs and incentives available to help first-time buyers, just like you, realize their dream of homeownership.

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Here’s what you need to know:

1. The Home Buyers’ Plan 

The Home Buyers’ Plan allows first-time buyers to borrow up to $35,000 from their Registered Retirement Savings Plan (RRSP) to put towards a down payment, tax-free. If you’re purchasing a home with a partner, friend or colleague who also qualifies as a first-time buyer, they too are eligible to withdraw the same amount for a total of $70,000.

How to Qualify: 

  • You are a resident of Canada
  • You (or your partner) cannot have owned a home in the last four years
  • The home must become your primary residence within a year of purchase
  • You have the funds available in your RRSP at least 90 days prior to withdrawal
  • You must make the withdrawal within 30 days of buying the home

Canada’s First-Time Home Buyer Programs Explained Key Image

2. The First-Time Buyer Incentive

The First-Time Home Buyer Incentive offers first-time buyers up to 10% on a home’s purchase price to put towards their down payment, through what is referred to as a “shared-equity” mortgage. By boosting your down payment, your mortgage costs will be lower, thus making owing your home more affordable in the long run.

How to Qualify: 

  • You are a resident of Canada
  • You (or your partner) cannot have owned a home in the last four years
  • You’ve saved the minimum 5% down payment (which the government will match by either 5 or 10%
  • Your household income does not exceed $120,000
  • You are borrowing no more than four times your qualifying income
  • The home must become your primary residence within a year of purchase

Canada’s First-Time Home Buyer Programs Explained Money Image3. Home Buyers’ Amount 

The Home Buyers’ Amount (HBA) offers first-time buyers a $5,000 non-refundable tax credit on a qualifying home purchase. In short, the HBA will provide $750 in federal tax relief, so long as you meet eligibility conditions.

How to Qualify: 

  • You are a resident of Canada
  • You (or your partner) cannot have owned a home in the last four years
  • The home must become your primary residence within a year of purchase

Canada’s First-Time Home Buyer Programs Explained Rebate Image

4. GST/HST New Housing Rebate

Under the GST/HST New Housing Rebate, you may qualify to receive a rebate on part of the GST (Alberta) you paid on the cost or purchase price of a new construction home. The rebate may also apply to a home you’ve built, renovated or made additions to or if you’ve converted a non-residential property into a residence. This refund can be extremely helpful when it comes to covering costs associated with legal fees, contractors and other closing costs.  

How to Qualify: 

  • You are a resident of Canada
  • You must have purchased a new or considerably renovated home from a builder for use as your primary home
  • You must have constructed or considerably renovated your home for use as your primary home

For more helpful home buying information, download the Pro Real Estate Group’s free Comprehensive Home Buyer’s Guide. And don’t forget to check out our Home Buying Blog!

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