Buying your first home is an exciting milestone, but tackling the real estate market can feel overwhelming. Voortman Realty is here to guide you every step of the way, helping you find the right home for your needs.
The path to homeownership looks different for everyone, and many first-time buyers can take advantage of valuable incentives to make the homebuyer process more affordable. Understanding your options can help you move forward confidently while feeling supported by a team of well-informed professionals.
What Incentives are Available for First-Time Homebuyers?
Land Transfer Tax Rebate
In Ontario, anyone purchasing land or an interest in land is required to pay a land transfer tax. However, first-time homebuyers may qualify for a refund of up to $4,000, helping to reduce the overall cost of purchasing a home. This incentive is designed to make homeownership more accessible for those entering the market for the first time.
Homebuyer’s Amount Tax Credit
The Homebuyer’s Amount Tax Credit is a non-refundable credit designed to assist first-time homebuyers with the costs of purchasing a home. It provides a set amount of money that can be claimed on your tax return, helping to reduce your overall tax liability.
Eligible buyers can receive a significant benefit, which can ease some of the financial strain associated with buying a new home. This credit is an excellent way for first-time buyers to access additional financial relief during the home-buying process.
GST/HST New Housing Rebate
When purchasing a newly built home in Canada, you’ll need to pay the GST or HST in addition to the purchase price. The specific tax rate you pay depends on your province, but regardless of location, you may be eligible for one of two housing rebates.
The GST rebate offers up to 36% of the GST paid on the purchase of a new home, with a maximum rebate of $6,300, applicable to homes with a market value of $350,000 or less. If the home costs between $350,000 and $450,000, you can still qualify for a partial rebate.
In provinces that charge HST, the rebate applies to the federal portion of the tax, and additional provincial rebates may be available.
Who is Eligible for These Incentives?
Land Transfer Tax Rebate Eligibility
- Must be at least 18 years old
- The home must be the primary residence within nine months of transfer
- Must be a first-time homebuyer
- If purchased before a certain date, the home must be newly built and qualify for the Tarion New Home Warranty
Homebuyer’s Amount Tax Credit Eligibility
- Must be a minimum of 18 years old when purchasing
- The home must be registered in the buyer’s or spouse’s/common-law partner’s name
- First-time homebuyer status is not required if eligible for the disability tax credit
- The maximum claim is $10,000, whether split or claimed alone
GST/HST New Housing Rebate Eligibility
- Available to individuals, not corporations or businesses
- The home must be the primary residence
- Must be newly built or substantially renovated
- Applies to various housing types, including condos, townhouses, and mobile homes
Other Programs that Benefit First-Time Homebuyers
Increased Mortgage Amortizations
Some programs benefit first-time homebuyers by offering extended mortgage amortization options. Certain policies allow eligible buyers to access 30-year amortizations, reducing monthly payments and making homeownership more affordable. This can be especially helpful for those entering the market with limited upfront funds.
Down Payment Requirements
The minimum down payment required depends on the home’s price. For homes up to $500,000, at least 5% is needed, while those between $500,000 and $1,500,000 require 5% on the first $500,000 and 10% on the rest. Properties over $1,500,000 need a minimum 20% down payment, and a larger down payment helps reduce monthly mortgage costs and total interest.
First Home Savings Account
A First Home Savings Account (FHSA) is a registered plan that helps first-time homebuyers save for a qualifying home without paying taxes on the growth, up to set limits. In the first year of opening an FHSA, you can contribute up to $8,000, and these contributions are typically tax-deductible. Nevertheless, transfers from an RRSP to an FHSA do not qualify for a tax deduction.
RRSP Home Buyer’s Plan
The Home Buyers’ Plan (HBP) lets individuals take funds from their RRSP to purchase or construct a qualifying home for themselves or an eligible disabled person. The maximum withdrawal allowed under this program is $60,000. It is also possible to combine an HBP withdrawal with an FHSA withdrawal for the same home, provided all requirements are met for both programs.
How Voortman Realty Can Help You Navigate Incentives
Purchasing a home can be a complex journey, especially when it comes to understanding the various homebuyer incentives available. Our team stays updated on the latest offerings, from tax credits to down payment assistance, to help you find the options that best fit your financial situation and homeownership goals.
Working with a knowledgeable realtor is essential for making sense of these programs and ensuring you benefit from available incentives. We provide personalized guidance, breaking down the details of each program so you can make informed decisions.
Whether you’re exploring extended mortgage amortization, the First Home Savings Account (FHSA), or the Home Buyers’ Plan, we ensure you fully grasp how these incentives work and how to maximize their advantages. We’re here to support new homebuyers in making the most of their opportunities! Contact us to get started today.