First-Time Home Buyer Grants

As a first-time home buyer, you’ll want to take advantage of various grants offered by various levels of government that will help make purchasing a home more affordable. Here are the key grants available to you if you’re buying a home for the first time:

First-Time Home Buyers' Tax Credit

This grant was introduced by the federal government in the 2009 federal budget. It allows first-time buyers to recover some of the costs associated with their purchase, such as legal fees, land transfer taxes and home inspections. 

The First-Time Home Buyers' Tax Credit (HBTC), at current taxation rates, initially worked out to a rebate of $750 for all first-time buyers. However, the 2022 federal budget allowed for this amount to be doubled to $1,500 for 2022 and all subsequent taxation years. After you buy your first home, the credit must be claimed within the year of purchase and it is non-refundable. In addition, the home you purchase must be a 'qualified' home, described in more detail below. If you are purchasing a home with a spouse, partner or friend, the combined claim cannot exceed $1,500 (or $750 for 2021 and prior taxation years) .

To receive your $1,500 claim, you must include it with your personal tax return on Line 31270 of your Schedule 1 (previously line 369 on your income tax return).

In order to be eligible for the credit, you must meet certain requirements. First, for your property to qualify it must be a new or existing home in Canada. Virtually all types of homes (detached, semi-detached, mobile home, condo, etc.) are acceptable. You must have the intention of residing in the home within one year of purchase.

To claim the tax credit, it must be registered in your name or your spouse’s name. In addition, you can’t have owned a home within the prior four years or have lived in a home owned by your spouse within that same timeframe. Finally, you must have documentation of your purchase.

Land transfer tax rebate

If you live in certain provinces or cities, you’re eligible for a rebate on some of the land transfer tax you paid when purchasing your house. The amount of the rebate varies depending on where you live. Land transfer tax rebates are available in Ontario, British Columbia, and Prince Edward Island. The City of Toronto also offers a land transfer tax rebate to first-time buyers. You may receive this in addition to the rebate available to those in Ontario.

 

RRSP Home Buyers' plan

Normally, any amount you withdraw from your RRSP is considered taxable income However, the government allows you to borrow up to $60,000 from your RRSP to help pay for your home as long as you qualify as a first-time buyer. The withdrawal limit was increased from $35,000 on April 11, 2024, and is in effect as of April 16, 2024. In order to meet this requirement, you must not have purchased a home within the last four years or also not have lived in a home owned by your spouse during this time.

Importantly, any funds borrowed from your RRSP for your down payment must be repaid. These repayments must begin five years after your purchase, and you have up to 15 years to make these payments. Originally, the repayments had to begin two years after your purchase, but this was increased to five years on April 11, 2024. 

 

GST/HST new housing rebate

This rebate helps Canadians who paid GST or HST by either buying a new home, renovating an existing one, or rebuilding one that was lost to fire. To qualify for this rebate, the home must be your primary residence. It’s also available to people who have purchased a mobile, floating or modular home.

All Canadians who qualify are eligible to receive the GST portion of the new housing rebate. This reflects the fact that the GST is collected by the federal government. In addition, Ontario offer rebates on the provincial portion of the HST paid by individuals who have either renovated a home or purchased a new one.

First-time home buyer savings account (First Home Savings Account)

In 2022, the federal government announced the creation of a new program to help buyers save for their first home. The First Home Savings Account, or FHSA, combines features of the Tax-Free Savings Account (TFSA) and Registered Retirement Savings Plan (RRSP), with some advantages over both. As with RRSPs, your contributions to your FHSA are tax-free, and as with TFSAs, any money your First Home Savings Account earns will also be tax-free. Unlike an RRSP, you don't have to pay yourself back for money you withdraw from the FHSA to buy your first home. You can learn more about the First Home Savings Account on our blog. 

First-time home buyer education topics

• First-Time Home Buyers' Tax Credit
• RRSP Home Buyers' Plan
• Land Transfer Tax Rebate
• First-Time Home Buyer Programs
• First-Time Home Buyer Loans

 

References and Notes

1. 2009 First Time Home buyer’s Tax Credit, Stephen H. Shub Professional Corporation, 2008-01-01
2. Fact Sheet: First Time Home buyer’s Tax Credit, Canada Revenue Agency, 2010-02-25