Buying your first home will arguably be the largest purchase you will make in your life thus far. The federal government also understands this and has created multiple programs that can make buying your first home more affordable. Here are some federal programs available to first time buyers and how they will help you.
The Home Buyer’s Plan allows you to withdraw up to $35,000 from your RRSP to buy or build a qualifying home. To be considered a qualifying home, the home must be either a single-family, semi-detached, townhouse, mobile, condominium, duplex, triplex, fourplex, or apartment within Canada. Under this program, first-time homebuyers will have up to 15 years to repay the amount withdrawn from their RRSP. The repayment period would start the second year after you withdraw your funds.
With the Home Buyer’s Amount, first-time homebuyers are eligible to claim $5,000 for the purchase of a home in Canada so long as you or your spouse/common-law partner purchased a home and you did not live in another home owned by you or your spouse/common-law partner the year you are purchasing the house or any of the four preceding years.
The First Time Home Buyer Incentive is a tool to help first-time homebuyers reduce their monthly mortgage repayments. This shared-equity mortgage with the Government of Canada offers 5% or 10% towards the purchase of a newly constructed home, 5% for the purchase of an existing home, and 5% for the purchase of a mobile or manufactured home. Under this program, first-time homebuyers must repay the incentive either after 25 years or when the home is sold – whichever comes first.
With the GST/HST new housing rebate, eligible first-time homebuyers will be able to recover some of the GST or the federal part of the HST paid for a new or substantially renovated house that is intended to be used as the primary place of residence. This rebate also applies to those who are purchasing property on leased land, shares in a cooperative housing corporation, or are constructing or substantially renovating their own home.
As a first-time homebuyer, there are many opportunities available to you to make buying your first home affordable. If you would like to learn more about each of these programs and how they may apply to you, please reach out to me here. I would love to help you get the best price on your first home.