First Time Home Buyer Programs in Canada
What Qualifies as a first-time homebuyer in Canada? The answer: It depends
Here's a breakdown of Canada’s first time home buyer (FTHB) programs
To start, each program defines a first time home buyer in a different way, which can make things confusing to some clients.
Here are the three major programs Canadians most often utilize: The Ontario Land Transfer Tax Rebate; The RRSP Home Buyers’ Plan (HBP); The First Home Savings Account (FHSA).
Ontario land transfer tax rebate
If you’re buying property in Ontario, the land transfer tax (LTT) rebate is available. It can save you up to $4,000 on the provincial land transfer tax, plus up to another $4,475 on the Toronto municipal land transfer tax if you’re buying in Toronto. The LTT rebate has strict guidelines in order to qualify:
-You must be at least 18 years old
-You must have never owned a home or any interest in a home anywhere in the world
-You must live in the home as your principal residence within nine months of the purchase
-Your spouse or common-law partner must also never have owned a home while you’ve been together
-residency restrictions also apply
RRSP Home Buyers’ Plan
The HBP allows qualified FTHB to use up to $60K in RRSP savings to help with a down payment. To qualify:
-You must not have lived in a home that you (or your spouse/common-law partner) owned in the current year or the four preceding calendar years
-You need a signed agreement to buy or build a qualifying home
-You must intend to make that home your principal residence within one year
-You must be a resident of Canada at the time of the withdrawal and when you buy the home
First Home Savings Account
To open and use an FHSA:
-You must be between 18 and 71 years old and a Canadian resident
-You must not have owned or jointly owned, or lived in, a qualifying home in the calendar year before you open the FHSA or during the previous four calendar years. *This rule also considers property owned by your spouse or common-law partner that you lived in
Does being a first-time buyer impact your mortgage?
For a High Ratio/ Insured mortgage, being a FTHB can provide additional options:
-Previous home owner buyers are eligible for a 30-year amortization with mortgage insurance only when purchasing newly built homes.
-First-time homebuyers are eligible regardless of whether they are buying a new or resale home.
Educating first time home buyers is our job. Supporting your home ownership journey from beginning to end is our purpose. We don't just help you buy it - we help you own it.
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