First-Time Home Buyer Incentive (FTHBI)
The First-Time Home Buyer Incentive (FTHBI) is designed to make homeownership more affordable by reducing monthly mortgage payments. This program offers first-time homebuyers 5% or 10% of the home’s purchase price to use as a down payment. Unlike traditional mortgages, the FTHBI is a shared-equity mortgage, meaning the government shares in the property’s appreciation or depreciation. While you don’t have to make ongoing payments, the incentive must be repaid after 25 years or when you sell the home, whichever comes first.
https://www.cmhc-schl.gc.ca/consumers/home-buying/first-time-home-buyer-incentive
Home Buyers’ Plan (HBP)
The Home Buyers’ Plan (HBP) allows first-time homebuyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) to put towards the purchase of a home. For couples, this amount can be doubled to $70,000. Withdrawals made under the HBP are tax-free, provided they are repaid within 15 years. This program offers a significant boost to your down payment without immediate tax consequences, making it an attractive option for many first-time buyers.
First Home Savings Account (FHSA)
The First Home Savings Account (FHSA) combines the benefits of RRSPs and Tax-Free Savings Accounts (TFSAs) to help Canadians save for their first home. Contributions to an FHSA are tax-deductible, and withdrawals made for the purpose of purchasing a home are tax-free. You can contribute up to $8,000 annually, with a lifetime contribution limit of $40,000. This account provides a flexible and tax-efficient way to save for your first home.
GST/HST New Housing Rebate
The GST/HST New Housing Rebate allows first-time homebuyers to recover some of the Goods and Services Tax (GST) or Harmonized Sales Tax (HST) paid on a new home. This rebate is available if you buy, build, or substantially renovate a home for use as your primary residence. By reducing the overall tax burden, this rebate can significantly lower the cost of your new home.
Land Transfer Tax Rebate
First-time homebuyers may be eligible for a rebate on the land transfer tax, which is a significant part of the closing costs when purchasing a home. In Ontario, for example, this rebate can be as much as $4,000. This rebate helps offset some of the financial burden associated with the land transfer tax, making it easier for first-time buyers to manage their closing costs.
https://www.ontario.ca/document/land-transfer-tax/land-transfer-tax-refunds-first-time-homebuyers
First-Time Home Buyers’ Tax Credit
The First-Time Home Buyers’ Tax Credit offers a $5,000 non-refundable income tax credit, which can provide up to $750 in federal tax relief. This credit is available to individuals who purchase a qualifying home and have not lived in a home owned by them in the previous four years. This tax credit can help reduce the overall cost of purchasing a home by providing a small but significant financial benefit.
These support programs are designed to make homeownership more accessible and affordable for first-time buyers in Canada. By taking advantage of these programs, you can reduce your financial burden and make your dream of owning a home a reality.
If you’re considering buying your first home in Sarnia-Lambton, reach out to us for personalized advice and support. Let’s make your dream of homeownership a reality with the right programs and guidance.