Perks of being a first-time home buyer

Being a first-time home buyer is exciting! Looking through house listings, deciding on your ‘must have’ list and considering new neighbourhoods is a once-in-a-lifetime experience for first time home buyers. There are several elements that go into the process.

The good news is that there are many benefits of being a first-time home buyer in Canada.

The Canadian government supports first-time home buyers! There are three main incentive programs that you should know about before signing the papers and getting the keys to your new place.

1. The Home Buyers’ Plan (HBP)

   It’s important to save before buying your first home. There are many ways that you can do this. One of the most effective ways to save for your first house is with your Registered Retirement Savings Plan (RRSP). If you have been putting money away for years (good thinking putting a little away from each paycheque when you got your first job!) as of 2024, you can lend yourself up to $60,000 tax-free from your RRSP with the Home Buyers’ Plan (HBP). If you are buying with a partner, and you are both first-time buyers, you can get up to $120,000 to put towards your purchase. There’s a 15-year repayment period that starts two years after you withdraw the money, or if you have the funds available, you can start paying it off sooner. This program was introduced in 1992 and has given hundreds of thousands of Canadians the opportunity to increase their buying power when they first enter the real estate market.

2. Land Transfer Rebates

   Rebates are also available for first-time home buyers. You may be eligible to receive a partial or full land transfer tax refund. In British Columbia the land transfer tax is determined by a tax-bracket system based on the purchase price of the home and a refund is offered for properties worth $500,000 and below.

3. Tax-Free First Home Savings Account

   An FHSA is a registered plan designed to help first-time homeowners save for a down payment. It is available to first-time home buyers that are Canadian residents between the age of majority (19 years in BC) and up to 71 years:

   • Annual FHSA contribution limit: $8,000 | Lifetime FHSA contribution limit: $40,000.
   • Contributions made to an FHSA are tax-deductible.
   • As with a TFSA, no taxes are paid on withdrawals made to purchase an eligible first home.

   There are also certain duration requirements for the First Home Savings Account. Accounts can stay open:

   • For a maximum of 15 years.
   • Until the end of the year when someone turns 71.
   • Until the end of the year following the year a qualifying withdrawal for a home purchase is made.
4. Bonus! Home buyer’s amount

   There are additional tax credits for home buyers. As a first-time homeowner you can claim up to $5,000 within one year of purchasing your home on line 31270 (which was line 369 before 2019) of your tax returns. Eligible home buyers could receive up to a $750 rebate!

For more information on any of the three programs, visit The Government of Canada website.

You are solely responsible for confirming that your FHSA, TFSA and RRSP contributions are within your allowable limits set by Canada Revenue Agency (CRA). All rules and contribution limits for FHSAs are set out by CRA and applicable legislation apply. Information about FHSAs is based on what is currently available from the Canadian government and may be subject to change.

Mutual funds and other securities are offered through Aviso Wealth, a division of Aviso Financial Inc.