While you work towards saving for a down payment and closing costs, below is information about the various programs and credits available to first-time home buyers. Some of these may help you reach the 5% amount quicker but do have pros and cons to consider.
You can also get insights and tips by visiting CMHC’s website to review the Homebuying Step by Step Guide.
1) First Time Home Buyers‘ Tax Credit of $750
There is a first-time home buyers tax credit. You will claim this on your first taxes after your purchase. It does not impact your purchase but will impact your return tax or the amount owing.
2) Tax-free first home savings account (FHSA)
The most recent one, just announced in the latest federal budget, begins in 2023 and allows $8,000 tax-free to be saved per year and used towards a down payment within 15 years.
3) The Home Buyers‘ Plan
You can use RRSP savings through the Home Buyers Plan. The max is $35,000 per person. This would be paid back over 15 years on your income tax or by contributing to your RRSP again. As you continue to save, I suggest using a TSFA or other joint savings that will also allow more options to use the money.
4) First-time home buyer land transfer tax rebate
First-time home buyers may be eligible to get a rebate of up to $4,000 for any land-transfer tax paid on the first $368,000 of qualifying homes. To claim the refund, you must be a legal adult who has never owned a home or an interest in a home (even one you inherited or were gifted by a family member).
The Home Ownership Program (HOP) assists low-to-moderate income households to buy affordable homes by providing down payment assistance in the form of a forgivable loan.
Households that are currently renting in the City of Kingston or the County of Frontenac and who do not have a vested interest in any other real estate may apply to the HOP for down payment assistance equal to 10% of the purchase price to a maximum of $44,000.
If you have a combined, pre-tax household income of less than $91,000 and would like to purchase a home priced at $440,000 or less in the City of Kingston or the County of Frontenac, you may be eligible for this program.
Looking for the First-Time Home Buyer Incentive? It was discontinued as of March 31, 2024.