The journey toward home ownership is definitely not as easy as we imagine it to be. Especially if you are a first-time home buyer navigating the housing market in Canada, there are a lot of first-time home buyer incentives by the government. But are you aware that the government of Canada provides several programs as well as incentives to aid first-time home buyers in purchasing a property in Canada? Let us discuss the available programs below.
THE HOME BUYERS’ PLAN (HBP)
With the help of this program, the buyers who are eligible can use up to $35,000 tax-free out of their Registered Retirement Savings Plan (RRSP) to put toward a down payment on their first home. You must not have owned a home in the previous four years and intend to use the property as your primary residence in order to be eligible for this program.
GST/HST REBATE ON NEW HOMES
This program enables qualified first-time purchasers to get a refund on the GST or HST they paid when buying a new or significantly remodelled house. The amount of the refund varies according to the cost of the home, as well as the tax rate in the province where the house is situated.
FIRST-TIME BUYER INCENTIVE PROGRAM (FTHBI)
Through this program, first-time home buyers can borrow up to 5% or 10% of the cost of the property and use it to pay towards the down payment. One thing to note is that the amount you borrow is entirely interest-free. It must be paid back within 25 years of purchase or when the property is sold. The amount repaid will be based on the value of the property at that time. Canadian citizens, permanent residents, and non-permanent residents who have resided in Canada for at least a year are eligible for the First Time Home Buyer Incentive.
REBATE ON LAND TRANSFER TAX
Home buyers are required to pay the provincial tax known as land transfer tax when the sale of a property is finalised. For first-time home buyers, several provinces provide a land transfer tax credit, which can drastically lower the up-front costs of buying a home.
FIRST HOME SAVINGS ACCOUNT
Canadians can save up to $8,000 annually and a maximum of up to $40,000 for a lifetime in a First house Savings Account toward the cost of their first house. This money can be used for various purposes, such as purchasing a range of financial products, including stocks, bonds, and mutual funds; the investment returns are tax-free. And whenever you wish, it is the right time to buy your first home; you can withdraw the funds from the account. To start saving for a home purchase in Canada, people must be at least 18 years old.
GREEN HOME PROGRAM BY CMHC
The Canada Mortgage and Housing Corporation green home program is a government initiative that gives premium refunds of up to 25% to home buyers who buy, construct, or modify a house that complies with specific energy-efficiency requirements. First-time homeowners who secure a CMHC-insured mortgage are eligible for the reimbursement.
CONCLUSION
Programs like these First Time Home Buyer Incentives help buyers reduce the financial burden of searching for affordable houses for sale and purchasing them. This way, home ownership is more accessible to Canadians. If you are a first-time home buyer in Canada, consider exploring these programs to determine which ones may be applicable to your situation. Also, make sure you do proper research and check whether you are eligible or not and what programs or incentives will suit you and your situation best.