Four Programs Available to First-Time Home Buyers In Canada

When buying your first home, there are more costs involved than you may expect. Between moving expenses, legal fees, inspections and taxes, purchasing a property involves a lot more than just saving for your down payment. It’s not uncommon for first-time buyers to skip on budgeting for these expenses and then get sticker shock when all of the additional costs pile up.

Thankfully, first-time home buyers in Canada have exclusive access to programs to help offset some of the costs. From rebates to tax credits, there are a variety of initiatives available to support prospective home buyers on their journey to homeownership.

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 Buyers’ Plan (HBP)

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html

This federal program through the Canadian Revenue Agency lets you withdraw up to $35,000 tax-free from your registered retirement savings 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pay back the HBP loan within a 15-year period to avoid penalties, starting the second year after the funds are first withdrawn.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 new housing rebate

https://www.canada.ca/en/revenue-agency/services/tax/businesses/topics/gst-hst-businesses/charge-collect-home-construction/new-housing-rebate.html

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

This program was discontinued March 31, 2024

https://www.cmhc-schl.gc.ca/en/nhs/first-time-home-buyer-incentive

Overseen by the Canada Mortgage and Housing Corporation (CMHC), this new buyer incentive program aims to reduce monthly payments with 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 percentage 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 household income must not exceed $120,000, your total borrowing cannot be more than four times your qualifying income, and you must meet minimum down payment requirements.

Down Payment Assistance Program Nova Scotia

https://housing.novascotia.ca/downpayment

The Down Payment Assistance Program (DPAP) assists Nova Scotians with modest incomes who pre-qualify for an insured mortgage to purchase their first home. Eligible participants can apply to receive an interest-free repayable loan of up to five per cent of the purchase price of a home.

The Home Buyers’ 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 Buyers’ Tax Credit (HBTC).

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31270-home-buyers-amount.html

A qualifying home falls under most residential structure types, including single-family, semi-detached, condominium 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.