Five Programs Available To First Time Home Buyers In Canada


There are more expenses than you might think involved with purchasing your first house. Buying a home includes much more than just saving for a down payment because of moving costs, legal fees, inspections, and taxes. First-time purchasers frequently neglect to budget for these charges and then experience sticker shock as the additional prices increase.

Thankfully, there are programmes available exclusively to first-time home purchasers in Canada that can help with some of the costs. There are many programmes available to assist potential house purchasers on their path to homeownership, including from rebates to tax credits.

Here, we give you the scoop on five first -time home buyer programs in Canada you can apply for when you’re ready to make the leap into homeownership.


The Home Buyer’s Plan (HBP)

The federal program through the Canadian Revenue Agency lets you withdraw up to $35,000 tax-free from your registered retirement saving plan (RRSP) as a loan to build or buy your first home.

In order to qualify for the HBP, you must be a first-time home buyer, have an agreement to buy or build, and intend to live in the qualifying home as your principal residence within one year after purchase or when the residence becomes habitable. You can make a single withdrawal from your RRSP or several within the same calendar year.

You must pay back the HBP loan within a 15-year period to avoid penalties, starting the second year after the funds are first withdrawn.


GST/HST Housing Rebate

Targeted specifically at Canadians buying a new construction property, the GST/HST new housing rebate allows you to recoup some of your tax expenses.

To be eligible, you’ll need to have purchased or built a new home, or substantially renovated your own existing home that has a fair market value under $450,000 once construction is complete. The property must be your primary place of residence. Floating and mobile homes are also eligible, as well as land that is leased for at least 20 years.

When you’ve applied for your tax rebate, be sure to keep a copy of the completed forms, original invoices and all other documents for up to six years.


The First Time Home Buyer Incentive

Overseen by the Canada Mortgage and Housing Corporation (CMHC), this buyer incentive program aims to reduce monthly payment using a shared-equity mortgage with the federal government.

New buyers can claim five or 10% of the property’s purchase price to put toward a down payment. Within a 25-year period, or when the home is sold, the same percent-age value of the home is paid back. The homeowner can also pay back the incentive in full at any time.

For the purchase of a resale property or mobile home, buyers can take a 5% incentive. If buying a new construction home, purchasers can take five or 10%.

To be eligible for the First-Time Home Buyer Incentive, your house-hold income must not exceed $120,000, your total borrowing can not be more than four times your qualifying income, and you must meet minimum down payment requirements.


The Home Buyer’s Tax Credit (HBTC)

If you’re a first-time home buyer with a qualifying home you could receive up to $5,000 of the purchase from the Home Buyer’s Tax Credit (HBTC).

A qualifying home falls under most residential structure types, including single-family, semi-detached, condo-minium and townhouse properties that are complete or under construction. Shares in a housing cooperative granting you the right of ownership also apply. However, for any of these property types, you must intend to occupy the home as your primary residence no later than one year after purchase.

To file for the rebate, simply enter $5,000 on line 31270 of your tax return. If you’re applying for the rebate with a spouse, you can split the rebate between the two returns without exceeding the $5,000 limit.


Land Transfer Tax Rebates

In Ontario, British Columbia and Prince Edward Island, first time home buyers can receive a reduction on their land transfer taxes. Land transfer taxes are paid when the transaction close and are based on the purchase price.

For Ontario buyers, rebates can be claimed from both the province and the City of Toronto, if applicable. Resale and new construction properties in Toronto could offer a rebate valued up to $4,475, so long as the applicant is a Canadian citizen or permanent residence of Canada, and the property will be lived in within nine months of purchase. For homes priced more than $400,000, buyers can still claim the maximum rebate but will need to pay the remainder of the land transfer tax.

Province wide, Ontarians can receive a rebate up to $4,000, covering the full tax amount for homes priced at $368,333 and under. Similar to Toronto, homes priced more than $368,333 can still receive the entire rebate, but the buyer will need to pay the balance of the tax.

In British Columbia, buyers can receive $8,000 in rebates, earning the full amount up to a $500,000 maximum purchase price. Between $500,001 and $524,999, only a partial rebate is given, and there is no rebate for prices above $525,000.

Buyers in Price Edward Island could receive up to $2,000, covering the full land transfer tax amount up to $200,000. If purchased for ore than $200,000, the property is not eligible for the rebate.