First Time Home Buyer Programs & Incentives
1) Land Transfer Tax Rebate or Refund:
- first time home buyers can be eligible up to a maximum of $4,000 for the purchase of their first home.
To qualify for the land transfer tax refund:
You must never have owned a home ever, anywhere
If the person you are buying a home with has owned a home before, the amount of the refund will be reduced
Link for more details: https://www.ontario.ca/document/land-transfer-tax/land-transfer-tax-refunds-first-time-homebuyers
2) Home Buyers’ Plan (HBP):
- the HBP allows each borrower to make a tax free withdrawal up to $35,000 ($70,000 for a couple) from their registered retirement savings account (RRSP) for the purchase their first home. You then have 15 years to repay what you’ve borrowed, interest-free, starting two years after you make your withdrawal.
To qualify for the first-time buyer RRSP Plan in Ontario:
The home must be a principal residence (meaning you are living there vs. renting it out)
You can take the cash out of your RRSP up to 30 days after buying the home
If you withdraw from your RRSP before closing on your new home, you must own or build the home by October 1st of the following year.
The Canadian government defines a first-time buyer as someone who has not owned a home that they occupied as their principal place of residence during the period beginning January 1st of the fourth year before the year of withdrawal and ending 31 days before your withdrawal.
If you owned and sold a home five years ago, or had a property that wasn’t your principal residence, you are still considered a first-time homebuyer.
Please see link for more details:
https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan/participate-home-buyers-plan.html
3) CMHC First Time Home Buyer Incentive Program (FTHBI):
Introduced in March 2019, the FTHBI aims to make housing more affordable for first-time Buyers in Canada. It’s essentially a shared equity program – where the Canada Mortgage and Housing Corporation (CMHC) contributes part of the downpayment in exchange for sharing in the appreciation (or loss) when the home eventually sells. Under this program, the buyer can essentially be eligible for an interest free loan of 5-10% of the value of their first home. The buyer does not need to repay the loan until they sell their home.
Here is the link from the Government of Canada for more details: https://www.placetocallhome.ca/fthbi/first-time-homebuyer-incentive
Note - there is a calculator that you can use to determine the loan amount that you may be eligible for based on your income and purchase price of your home
4) The Tax-Free Home Savings Account (FHSA):
The FHSA is a new account that allows you to save for your first home. It also allows you to make tax-deductible contributions of up to $8,000 per year, up to a lifetime maximum of $40,000. Your contribution room starts to accumulate as soon as you open your first account. You can carry forward your unused FHSA contribution room, up to a maximum of $8,000, to use in the following year.
5) First Time Home Buyer Tax Credit (HBTC):
Closing costs for a home purchase include one-time items such as lawyer fees, HST (on newly constructed homes), and adjustments (e.g. taxes or utilities prepaid by the seller) that allow you to complete the house purchase.
To assist first-time home Buyers with these costs, the government created the First-Time Home Buyers Tax Credit, a $5,000 non-refundable income tax credit that results in up to $750 in federal tax relief.
Who Qualifies as a First Time Home Buyer for Ontario’s Tax Credit?
The home must be used as your principal residence
You did not live in a home owned by you or your spouse in the previous four years
If you buy with a spouse/friend/family member, they must be a first-time home buyer too
You OR your spouse/friend/family member can claim the credit, or you can share it – the maximum credit between you and any other owners is $750
Please see links below for other incentives you may be eligible for:
https://www.cmhc-schl.gc.ca/consumers/home-buying/government-of-canada-programs-to-support-homebuyers