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If you’re a first-time buyer, you’ll be thrilled to hear that the The Government of Canada is offering the First-Time Home Buyer Incentive.
The First-Time Home Buyer Incentive helps people across Canada purchase their first home. The program offers 5% or 10% of the home’s purchase price to put toward a down payment. This addition to your down payment lowers your mortgage carrying costs, making homeownership more affordable. This program is a shared equity instrument. It works by getting an extra 5% or 10% of the down payment of your home and then repaying the Government either 5% or 10% of the property’s market value at the time of repayment, up to a maximum repayment amount equal to:
– In the case of appreciation, the Incentive amount plus a maximum gain to the Government of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment; or
– In the case of a depreciation, the Incentive amount minus a maximum loss to the Government of 8% per annum (not compounded) on the Incentive amount from the date of advance to the time of repayment.
But here’s the thing — that’s not the only perk of being a first-time buyer.
There are other home buying assistance programs for those trying own homeownership for the first time.
First Home Savings Account (FHSA)
A first home savings account (FHSA) is a registered plan allowing you, as a prospective first-time home buyer, to save for your first home tax-free (up to certain limits). Click HERE for more information.
First Time Home Buyers’ Program
The first time home buyers’ program reduces or eliminates the amount of property transfer tax you pay when you purchase your first home. If you qualify for the program, you may be eligible for either a full or partial exemption from the tax.
To qualify for a full exemption, among a few other criteria, the property must be used as your principal residence, it must have a fair market value of $500,000 or less, and must be 1.24 acres or smaller . You may qualify for a partial exemption from the tax if the property has a fair market value less than $525,000, is larger than 1.24 acres, or has another building on the property other than the principal residence. Click HERE for more information.
First-Time Home Buyers’ Tax Credit (HBTC)
First-time home buyers who acquire a qualifying home can claim a non-refundable tax credit of up to $1,500 . The value of the HBTC is calculated by multiplying $10,000 by the lowest personal income tax rate (15% in 2022). Click HERE for more information.
GST New Housing Rebate
The GST new housing rebate allows an individual to recover some of the GST paid for a new or substantially renovated house that is for use as the individual’s, or their relation’s, primary place of residence, when all of the other conditions are met. You may also qualify for the rebate if you constructed or substantially renovated your own home or hired someone else to construct or substantially renovate your home for use as your (or your relation’s) primary place of residence, if the fair market value of the house when the construction is substantially completed is less than $450,000. Click HERE for more information.
Home Buyers’ Plan (HBP)
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability. Currently, the HBP withdrawal limit is $35,000. This applies to withdrawals made after March 19, 2019. Click HERE for more information.
Newly Built Home Exemption
The newly built home exemption reduces or eliminates the amount of property transfer tax you pay when you purchase a newly built home. In order to qualify the property must only be used as your principal residence, have a fair market value of $750,000 or less, and be 1.24 acres) or smaller. You may qualify for a partial exemption, if the property has a fair market value greater than $750,000 and less than $800,000, is larger than 1.24 acres, or has another building on the property other than the principal residence. Click HERE for more information.
Navigating all these programs can be tricky, which is why we’re here to support you every step of the way. So….let’s chat!
Comment or DM us today to find out more about these programs and other little-known resources available in our community.
Together, let’s make your dream of homeownership a reality!
“Bringing You Home to the Good Life”
Morrison Bifford Real Estate Group
Royal LePage Locations West Realty
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