For the vast majority of Canadians, their home is the biggest and most important investment they’ll ever make. But for first-time homebuyers in a highly competitive housing market like Metro Vancouver, simply saving up enough money for the down payment on their first property can sometimes feel like an insurmountable obstacle.
Luckily, there are a number of federal and provincial government programs, tax credits, rebates and other initiatives available to help first-time buyers be able to afford their down payment, buy their first homes and start climbing the property ladder.
Here are five of our personal favorites, along with a brief overview of how they work, who’s eligible to apply—and how much money you could be entitled to receive.
Five programs to help first-time buyers
1. First-Time Home Buyers’ Tax Credit (HBTC): the First-Time Home Buyers’ Tax Credit is a non-refundable credit that first-time homebuyers can claim in the year they purchase their first home. Under the program, buyers can qualify for a rebate of up to $1,500 when they file their income taxes.
2. Home Buyers’ Plan (HBP): the federal Home Buyers’ Plan allows first-time buyers to withdraw up to $60,000 from their Registered Retirement Savings Plans (RRSPs) to put towards the down payment on a home. The maximum amount is calculated per person, so for married or common-law couples, that could translate into a total of $120,000. Best of all, you have 15 years to pay the money back into your registered plan!
3. First Home Savings Account (FHSA): the First Home Savings Account is a relatively new program that lets anyone who hasn’t lived in a home they own for the past four years save up to $8,000 a year tax-free to either buy or build a home.
Combining the best features of both an RRSP and a Tax-Free Savings Account (TFSA), the FHSA lets you claim a deduction on your taxes in the year you make the contribution, while also allowing the investments inside the FHSA to grow tax-free until you need to use them. First-time buyers can contribute up to $40,000 per person to their FHSA over five years, or up to $80,000 per couple.
4. GST/HST New Housing Rebate: for newly-built homes with a market value of $450,000 or less, the GST/HST new housing rebate lets buyers apply for a rebate of up to 36% of the GST/HST charged on the home, up to a maximum rebate of $6,300.
5. B.C. First-Time Home Buyers’ Program: last but not least, first-time homebuyers who live in British Columbia can also qualify for the B.C. First-Time Home Buyers’ Program. Depending on their eligibility, buyers who qualify for the program can apply to receive a partial or even full refund of their property transfer tax—potentially saving them thousands of dollars on the purchase of their first home.
Want to learn more?
Interested in finding out more about any of these programs, or seeing if you might be eligible for any support? Contact us for the answers to any questions you have!