Incentives for First-Time Homebuyers

Homeownership is a significant milestone for many Canadians, but with the rising costs in the housing market, getting into the real estate market is getting more difficult. The good news is that you’re not alone. There are government homebuying incentives in Canada designed to ease the financial burden and help make your dream of owning a home a reality.

Federal Tax Incentives for Buying a Home

First-Time Home Buyers’ Tax Credit (HBTC)

The First-Time Home Buyers’ Tax Credit (HBTC) is a non-refundable tax credit to offset some of the initial costs associated with purchasing your first home in Canada. The HBTC provides a tax credit of $5,000, which translates to up to $750 in tax savings for the year of purchase.

Federal Government Homebuying Incentives in Canada

Home Buyers’ Plan (HBP)

The Home Buyers’ Plan (HBP) allows first-time homebuyers to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) to help purchase or build a qualifying home without incurring immediate tax penalties on the withdrawal. Each individual can withdraw up to $60,000, allowing a couple to withdraw up to $120,000. The amount withdrawn must be repaid into your RRSP over 15 years, beginning the second year after the withdrawal.

Tax-Free First Home Savings Account (FHSA)

The Tax-Free First Home Savings Account (FHSA) combines the advantages of a Registered Retirement Savings Plan (RRSP) and a Tax-Free Savings Account (TFSA) to help first-time homebuyers save for a down payment. You can deposit up to $8,000 per year into an FHSA, with the maximum lifetime contribution limit being $40,000, all of which is tax-deductible. Investment growth within the FHSA is tax-free, and withdrawals that are used to buy a first home are also tax-free.

Provincial Government Homebuying Incentives in Canada

First-Time Home Buyers’ Program (BC)

This program provides exemptions or reductions in the Property Transfer Tax for first-time homebuyers in British Columbia. It offers full exemption for homes up to $500,000 and partial exemption for homes between $500,000 and $525,000.

Alberta First Place Program

Administered by the City of Edmonton, in partnership with the builder community, The Alberta First Place program offers homeownership opportunities by repurposing surplus school building sites for the development of affordable homes.

Saskatchewan First-Time Homebuyers’ Tax Credit

The Saskatchewan First-Time Homebuyers’ Tax Credit provides a non-refundable tax credit of up to $1,050. This is calculated as a percentage of qualifying home purchase costs, subject to provincial limits.

Land Transfer Tax Refunds for First-Time Homebuyers (Ontario)

Ontario offers first-time homebuyers a refund for all or part of the land transfer tax. The maximum refund is up to $4,000.

Home Ownership Program in Quebec (Accès Condos)

The Accès Condos program facilitates the purchase of a condo with a down payment as low as $1,000. The program provides the opportunity to buy a condo with just $1,000 down.

Tax Credit for the Purchase of a First Home (Quebec)

This credit provides financial relief by offering a non-refundable tax credit to first-time homebuyers in Quebec. It is a non-refundable tax credit that translates into savings on your provincial income tax.

Newfoundland and Labrador First-Homebuyers Program

This program offers financial assistance to first-time homebuyers in Newfoundland and Labrador to help with their closing costs. The program provides 50 percent of the closing costs up to $1,500 plus a repayable loan up to five percent of the purchase price of a new or existing home, to a maximum purchase price of $350,000.

New Brunswick Home Ownership Program

The New Brunswick Home Ownership Program is a provincial initiative designed to make homeownership more attainable for low- and moderate-income families in New Brunswick. The program offers financial assistance for the down payment on a home in the form of a forgivable loan or grant.

Nova Scotia First-Time Homebuyers Rebate Program

The Nova Scotia First-Time Homebuyers Rebate Program offers a rebate to offset some of the costs associated with the Harmonized Sales Tax (HST) on newly built homes or significant renovations. The rebate provides up to 36 percent of the provincial portion of the HST paid on a newly constructed home or substantial renovations, up to a maximum purchase price of $450,000. The maximum rebate is $3,000.

PEI First-Time Home Buyer Program

The PEI First-Time Home Buyer program provides an interest-free loan of up to 5 percent of the home’s purchase price for up to 10 years.

Regional & Municipal Homebuying Incentives in Canada

Attainable Homes Calgary Corporation (AHCC)

The AHCC provides affordable housing solutions for qualified buyers in Calgary, including down payment assistance. You need to contribute $2,000 of your own funds towards the down payment. The incentive amount for subsidized homes is up to $50,000 in shared-equity loans for down payments on qualifying properties.

Toronto’s Home Ownership Assistance Program (HOAP)

Toronto’s HOAP provides down payment assistance loans of up to $50,000 to assist with down payments, which are repayable upon the sale of the home. Other cities in Ontario, like Kingston, Collingwood, and Haldimand-Norfolk, have similar down payment assistance programs.

Contact a RE/MAX agent today to explore how we can help you find your perfect home and make the most of the available Canada homebuying incentives.