Unlock Your Dream Home: 7 First-Time Home Buyer Incentives and Programs

Ever pondered the prospect of owning your first home, only to be daunted by the financial complexities? Don’t worry! A myriad of government rebates, grants and incentives exist, designed to alleviate the fiscal strain for first time homebuyers and bring your new home within reach. Stepping into the role of your trusted advisor, this comprehensive guide reveals numerous initiatives, encompassing the First-Time Home Buyers' Program, Newly Built Home Exemption, First-Time Home Buyer Incentive, Home Buyers' Plan (HBP), Tax-Free First Home Savings Account, GST/HST New Housing Rebate, and the Home Buyers' Tax Credit (HBTC). Together, we'll explore the eligibility prerequisites, advantages, and critical specifics, empowering you to make your journey to homeownership smoother and more affordable.

The First Time Home Buyers' Program: Save Big on Your First Home

The first program we’ll look at is the First Time Home Buyers' Program: your potential lifeline to easing one of the most significant financial burdens in home purchasing - the property transfer tax. Let's examine the eligibility criteria, exemption possibilities, and other vital details to find out if you're on track for some home-buying savings.

Envision this scenario: you and a friend decide to team up and buy a home together, but you're the only one who meets the first-time buyer criteria. In such cases, the tax relief zeroes in on your share of the property. If you have a 60% stake and your friend has the remaining 40%, the exemption applies exclusively to your portion, making the savings distinctly yours.

Are you eligible? Here's what you should know:

• Be a Canadian citizen or permanent resident

• Have either:

  • Lived in B.C. for at least a year immediately before the date you register the property

  • Filed at least 2 income tax returns as a B.C. resident in the last 6 taxation years immediately before the registration date

• Have never owned a registered interest in a property that was your principal residence anywhere in the world at any time

• Have never received a first-time home buyers' exemption or refund

And the property? Here's what it needs:

• It must be your primary residence.

• Its fair market value must not exceed $500,000.

• The property must be 0.5 hectares (1.24 acres) or smaller.

If your first home doesn't meet all these criteria, don't fret; a partial exemption might still be within reach. You could be eligible if the property:

• Has a fair market value below $525,000.

• Exceeds 0.5 hectares in size.

• Has another building on the property besides the principal residence.

The First-Time Home Buyers' Program can be a game-changer for those starting their homeownership adventure. With substantial savings through reduced or even eliminated property transfer tax, your first home becomes more attainable. To learn more and determine if you qualify for this program, visit HERE for all the essential information.

Newly Built Home Exemption Program: Save Thousands on Your New Home

If you're a homebuyer considering a new home, townhome, or apartment, the Newly Built Home Exemption program might be tailored just for you. This program is an opportunity to reduce or even eliminate property transfer tax for purchasers of brand-new properties, resulting in substantial savings. Let's delve into the benefits, details, and eligibility requirements of this program, designed to make your homeownership dreams more attainable and affordable.

First, let's outline what constitutes a "newly built home" under this exemption:

• A brand-new house on a parcel of vacant land

• A new apartment in a newly built condominium building

• A manufactured home, situated and affixed on a parcel of vacant land

• A pre-constructed house that is removed from one parcel of land and affixed to another parcel of vacant land, provided the house hasn't been occupied since it was placed on the new parcel of vacant land

• A house resulting from the division of an existing home or improvement affixed to a parcel of land that was also subdivided, as long as the house hasn’t been occupied since the subdivision of the parcel

• A house converted from an existing improvement on the land provided the previous improvement wasn’t used as residential

Meeting all the eligibility requirements could entitle you to a full or partial exemption from property transfer tax. Have you already paid this tax on vacant land that now hosts a newly built home? You might be in for a tax refund.

The Eligibility Checklist

To qualify for this money-saving exemption, your property transfer must be registered at the Land Title Office after February 16, 2016, and meet the following criteria:

• You're an individual 

• You're a Canadian citizen or permanent resident (have your SIN or proof of permanent residency and birthdate ready)

Additionally, your property must:

• Be situated in B.C.

• Serve as your primary residence

• Possess a fair market value of $750,000 or less

• Be 0.5 hectares (1.24 acres) or less

Partial Exemptions and More

You might still be eligible for a partial exemption if your property:

• Has a fair market value between $750,000 and $800,000

• Is larger than 0.5 hectares

• Has another building on the property other than the principal residence

The Newly Built Home Exemption program presents a fantastic opportunity for homebuyers to secure significant savings on property transfer tax. You could land a full or partial exemption by satisfying specific eligibility conditions, making your dream home even more accessible. Eager to learn more about this fabulous program and explore your options? Check out for further details and discover how the Newly Built Home Exemption can enhance your home-buying journey.

First-Time Home Buyer Incentive: Opening Doors to Homeownership Across Canada

Up next is the First-Time Home Buyer Incentive. This Government of Canada program aims to make your home-buying journey easier by providing financial assistance to decrease your monthly mortgage payments. Intrigued? Let's dive into this opportunity for first-time home buying by taking a look at the program's benefits and eligibility requirements.

The First-Time Home-Buyer Incentive serves as a shared equity instrument, offering an extra 5% or 10% towards your home's down payment. This addition to your down payment lowers your mortgage carrying costs, making homeownership more affordable.

In return, you will reimburse the Government either 5% or 10% of the market value of the property when the repayment time arrives, with a maximum repayment sum based on these scenarios:

• If your home appreciates, you'll repay the Incentive amount plus a maximum gain of 8 percent per annum (non-compounded) on the Incentive from the advance date to the repayment date.

• If your home depreciates, you must pay back the Incentive amount minus a maximum loss of 8 percent per annum (non-compounded) on the Incentive from the advance date to the repayment date.

Who's Eligible for the First-Time Home Buyer Incentive? As the name suggests, this program is tailored for first-time homebuyers. You qualify if:

• You've never purchased a home before.

• You haven't lived in a home owned by you or your current spouse/common-law partner in the last 4 years (this 4-year period starts on January 1 of the fourth year before the Incentive is funded and ends 31 days before the funding date).

• You've recently experienced a marriage or common-law partnership breakdown, even if you don't meet the other first-time homebuyer requirements.

The First-Time Home Buyer Incentive is an outstanding federal program designed to render homeownership more achievable. By offering financial support for your down payment, this program lessens your monthly mortgage payments and brings your first home within reach. To learn more about how this program can benefit you, visit HERE for additional details.

Home Buyers' Plan (HBP): Unlocking Your RRSPs

The Home Buyers' Plan (HBP), is a program devised by the Canadian government, available for first-time home buyers. Let's explore how you can use your Registered Retirement Savings Plans (RRSPs) to purchase or construct your first home, or even assist a family member with a disability in achieving the same.

The Home Buyers' Plan is a first-time homebuyer's secret weapon, permitting you to withdraw funds from your RRSP for a down payment on a home. What's more? You'll have 15 years to repay it into your RRSP account. Just ensure you make the annual HBP minimum payment to avoid it being added to your taxable income.

In 2019, the withdrawal limit increased to $35,000 per person. Thus, if you and your partner both have RRSPs, combined, you could potentially withdraw an impressive $70,000! The best part? The funds you withdraw from your RRSP under the HBP aren't taxed at the time of withdrawal, as long as you adhere to the rules. To avoid taxes, repay at least 1/15 of the total amount annually. If you don't, the unpaid portion is added to your RRSP income and becomes taxable.

Are You HBP Eligible?

To access the HBP benefits, you'll need to:

• Reside in Canada when applying and until the home is bought or built

• Qualify as a first-time homebuyer under the Income Tax Act (Canada)

• Have a written agreement to buy or build a home (for yourself or a family member with a disability)

• Plan to make the home your primary residence within a year

• Remain in Canada when withdrawing the funds

• Complete the home purchase within the last 30 days

Fun fact: You might still be considered a first-timer even if you've owned a home before! As long as you didn't live in a home owned by you, your current spouse, or your common-law partner within a four-year period, you're good to go.

Other HBP Considerations

The Home Buyers' Plan also covers scenarios like buying or building a home for a relative with a disability or after separating from your partner.

The Home Buyers' Plan is a powerful resource to help first-time homebuyers make their homeownership dreams come true. By allowing you to withdraw up to $35,000 from your RRSP without taxes, it provides a significant financial boost for your down payment. For more information on the HBP and to see if you're eligible, visit HERE.

Tax-Free First Home Savings Account: Your Ticket to Homeownership

If you're yearning for a place to call home, it's time to introduce you to the Tax-Free First Home Savings Account (FHSA) – a powerful tool designed to make the dream of homeownership a reality. The 2022 federal budget proposal brought forth this game-changing savings account, enabling you to save an impressive $40,000 tax-free for your first home. Ready to learn more? We'll break down the FHSA's essential components, eligibility requirements, and how this tool can reshape your path to owning a home.

Starting in April 2023, the FHSA aims to support Canadians aged 18 and above by providing a means to save up to $40,000 for their first home. You can contribute up to $8,000 per year, but keep in mind, you must utilize these funds within 15 years of opening the account or before turning 71, whichever comes first. It's a winning combination – the tax-deduction advantages of a Registered Retirement Savings Plan (RRSP) and the tax-free growth of a Tax-Free Savings Account (TFSA). In essence, every dollar you save and earn in this account propels you closer to buying your first home.

Now, let's tackle eligibility. To qualify for the FHSA, make sure you:

• Reside in Canada

• Are at least 18 years old (or the age of majority in your province or territory)

• Verify that neither you nor your spouse has owned a home in which you resided during the year the account is opened or in the previous four calendar years

The Tax-Free First Home Savings Account is an invaluable tool for first-time homebuyers. The primary benefit of this program is the ability to save up to $40,000 tax-free toward your dream home. Combining RRSP tax-deduction perks with TFSA tax-free growth, the FHSA makes homeownership more accessible. To learn more about the FHSA and how to get started, visit the official program website.

GST/HST New Housing Rebate: The Secret to Saving on Your New Home

This Canadian federal government program offers significant rebates on the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) for new homes or major renovations. Let's examine this exceptional rebate program, dissect the eligibility criteria, and navigate the process of claiming your savings.

Are You Eligible for the New Housing Rebate?

You might be wondering if there's a catch. The great news is there isn't one! To be eligible, your new house, condo, mobile home, B&B, duplex or floating home must serve as your primary residence in Canada. Whether you're purchasing from a registered builder or constructing your own dwelling, as long as it's never been occupied before, you're good to go. What's more, resale home buyers aren't left out—if your home has experienced extensive renovations (replacing at least 90% of the interior), you might still be eligible for a partial rebate.

How to Claim the New Housing Rebate?

Ready to get your rebate? No problem! Just fill out the government form within two years of your home's construction date. Be sure to include your personal information, home details, a copy of your sales contract, and a settlement statement. Depending on your situation, you might need additional documentation.

Pro tip: If you've purchased a new home from a builder, they might be able to apply for the rebate on your behalf. Once your application is reviewed and approved, a delightful cheque will make its way to your mailbox!

How Much Can You Save with the GST/HST New Housing Rebate?

Now, let's talk savings. You could save up to $6,300! The rebate covers 36% of the GST or federal portion of the HST paid on a newly constructed home valued at $350,000 or less. If your home is worth more, you might still qualify for partial federal and provincial rebates.

The GST/HST New Housing Rebate is a phenomenal program that can help you save when purchasing a new home or undergoing significant renovations. The primary advantage is the potential to save up to $6,300 on the GST or federal portion of the HST paid on a newly constructed home. Eager for more information? Visit the government's official website for comprehensive details on the program.

Home Buyers' Tax Credit (HBTC): An Extra Boost for First Time Home Buyers

Last, but not least, is the First-Time Home Buyers' Tax Credit (HBTC). This non-refundable income tax credit can make your entry into homeownership a little bit sweeter by letting you claim up to $5,000 on the purchase of a qualifying home in Canada. It's a welcome helping hand for tackling initial costs like inspection fees and legal expenses. So, let's explore the ins and outs of this program, from eligibility criteria to the benefits you can reap.

The HBTC covers a wide array of property types, including single-family homes, condos, and even mobile homes. Whether you're purchasing an existing property or building a new one, you could be eligible for this credit.

Qualifying for the HBTC is simpler than you might think. Just make sure you:

• Buy a qualifying home and register it under your name or your spouse's/common-law partner's name.

• Intend to occupy the property as your principal residence within a year of purchasing or constructing it.

• Are a first-time homebuyer, meaning neither you nor your spouse or common-law partner has owned a home within the past four years.

Now, you might wonder if it's possible to claim the HBTC more than once. Good news! You can, provided that neither you nor your spouse/common-law partner has owned a home during the previous four years. Plus, if you're eligible for the disability tax credit or buying the home for a disabled relative, you don't even need to be a first-time homebuyer to claim the HBTC.

So, what's the value of this credit? The HBTC can provide up to $750 in federal tax relief. While not a huge sum, it does help with minor expenses like inspection fees, legal costs, and land transfer taxes. Keep in mind that the credit is non-refundable, so if you owe less than $750 in taxes, you won't get the remaining amount as a cash refund.

The First-Time Home Buyers' Tax Credit (HBTC) offers a valuable advantage for those looking to buy their first home. By allowing you to claim up to $5,000 in non-refundable tax credit, it eases some of the financial burdens that come with purchasing a home. For more information, check out the official government website.

Final Thoughts: Jumpstart Your Homeownership Journey with Confidence

 As you wrap up learning about these programs to help you along your homeownership journey, it's important to remember that the level of satisfaction you'll derive from the experience will be directly proportional to the effort and resources you put into it. With a multitude of government programs and incentives for first-time home buyers, you can not only maximize your investment but also secure your dream home a little easier. We hope our comprehensive guide has equipped you with a wealth of valuable insights into the range of options available, enabling you to make informed decisions that will positively impact your journey. And if you're feeling overwhelmed, remember that a professional REALTOR® can help guide you through the complex process. So take a deep breath, enjoy the ride, and let us be your trusted partner on the road to homeownership.

Common Questions and Answers for First-Time Homebuyers Programs

Q: As a first-time homebuyer in Vancouver, what incentives and grants are available to me?
A: There are several incentives and grants available for first-time homebuyers in Vancouver. One of the key programs is the First-Time Home Buyer Incentive (FTHBI) offered by the Government of Canada. This program is a shared-equity mortgage with the government, designed to reduce your monthly mortgage payments without increasing your down payment. You can also take advantage of the Home Buyers' Plan (HBP) which allows you to withdraw from your Registered Retirement Savings Plan (RRSP) to buy or build a qualifying home. Remember, eligibility criteria apply for these programs, so it's important to check if you qualify.

Q: What is the First-Time Home Buyer Incentive and how does it work?
A: The First-Time Home Buyer Incentive is a program by the Government of Canada designed to help first-time homebuyers reduce their monthly mortgage payments. The program provides an interest-free loan that is a percentage of the purchase price of your home, which must be repaid within 25 years or when the property is sold, whichever comes first. The repayment amount is based on the market value of the home at the time of repayment. It's important to note that this program is a shared equity mortgage, meaning the government shares in the gain or loss of the market value of your home.

Q: How can I calculate my potential monthly mortgage payments with the First-Time Home Buyer Incentive?
A: You can use the First-Time Home Buyer Incentive calculator provided by the Government of Canada. This tool will help you estimate your eligibility and potential savings on your monthly mortgage payments. The calculator takes into account factors like your household income, the amount you have for a down payment, and the purchase price of the home.

Q: Can I apply for the First-Time Home Buyer Incentive if I'm buying a home in Toronto?
A: Yes, the First-Time Home Buyer Incentive is available to eligible buyers across Canada, including in major metropolitan areas like Toronto. However, the program has specific eligibility requirements, including qualifying income limits and maximum mortgage amounts, which may vary depending on the market value of homes in your area.

Q: What happens if I sell my home before the 25-year repayment period for the First-Time Home Buyer Incentive?
A: If you sell your home before the 25-year repayment period, you must repay the incentive in full at the time of sale. The repayment amount is based on the market value of your home at the time of sale. If the value of your home has increased, you will repay more than you borrowed. Conversely, if the value of your home has decreased, you will repay less than you borrowed.