When buying your first home, don’t leave money on the table! Take advantage of the programs and incentives offered by the federal government that can help you achieve your new home. 

  1. Tax-Free Home Savings Account (FHSA): This new registered plan combines features of an RRSP and TFSA, giving first-time buyers the ability to save $8,000 per year tax-free (lifetime maximum of $40,000) toward the purchase of a home. Like an RRSP, contributions are TAX-DEDUCTIBLE and any unused contribution room can be carried over into the next year. Like a TFSA, there is no tax withheld on withdrawals (provided the funds are used to purchase a qualifying home) and any interest earned or growth accumulated inside the plan is tax-exempt. If there are two eligible first-time buyer purchasing a home together, each individual can contribute to an FHSA, effectively doubling the annual saving to $16,000 per year and a maximum contribution of $80,000. 
  2. RRSP Home Buyer’s Plan: First-time buyers can withdraw from their RRSP’s up to $35,000 per person tax free to buy or build a qualifying home, which can be a big boost to your overall downpayment, and may help you reach the 20% down needed to avoid mortgage default insurance premiums. You are required to repay the withdrawn funds on a 15-year repayment plan that begins the second calendar year after withdrawal.
  3. First-Time Home Buyer Incentive: This shared equity program was created to help make homeownership more attainable for eligible first-time buyers. The incentive would provide 5% of the purchase price of an existing home, or 5% or 10% of the purchase price of a new home which would reduce the mortgage amount, thereby making monthly payments a little more manageable. There are a few restrictions, maximums, minimums, etc. To qualify, your annual house income cannot exceed $120,000 and your total borrowed amount cannot exceed 4x your annual household income. So, let’s say your annual household income is $110,000 and you wan to purchase an existing home with the minimum downpayment amount (5% up to $500,000 and 10% on any amount over and above). Since the borrowed amount cannot exceed $440,000 (4x $110,000), you would have to find a home with a maximum purchase price of approximately $463,000. The incentive would be added to your downpayment which would reduce your mortgage and, in turn, reduce your monthly mortgage payment. The incentive must be repaid in 25 years or when you sell the home – whichever is sooner – you can voluntarily repay the incentive amount at any time without penalty. The repayment amount is based on the property’s fair market value at the time of repayment, whether it has increased or decreased, up to maximum of 8% appreciation or depreciation. 
  4. First-Time Home Buyer Tax Credit: Qualifying first-time buyers can claim a portion of their home purchase on their personal tax return for the year of the purchase, which will help to offset your closing cost such as legal fees. The $10,000 non-refundable tax credit provides up to $1,500 in federal tax relief. 
  5. GST/HST New Housing Rebate: If you are purchasing a new construction home or performing substantial renovations to an existing home, you can recover some of the the taxes you paid if all eligibility conditions are met. Canada Revue Agency’s Guide RC4028- GST/HST New Housing Rebate – has all the specifics. Submit the form applicable to you with your personal income taxes within two years of the actual closing date. 
  6. CMHC Eco Plus Program: Homeowners purchasing a qualifying energy-efficient home with an insured mortgage are eligible for up to a 25% mortgage insurance premium refund., which can be a substantial savings. If you buy a home and renovate it to make it more energy-efficient you can also apply for this refund.