For cash-strapped first-timers, there are government programs and tax credits to help offset some of the costs for your new home.

The Home Buyers’ Plan

As a first-time home buyer, you’re eligible for the Home Buyer’s Plan, which will allow you to withdraw up to $25,000 from your Registered Retirement Savings Plan (RRSP) to put towards your down payment. The catch? Any amount you withdraw must be paid back fully within 15 years, with a set amount required by the end of each year. If you can’t pay it back on time, the remaining amount is added to your personal income for that year and you will need to claim it on your income taxes. 

First-Time Home Buyer’s Tax Credit (HBTC)

The Home Buyer’s Tax Credit (HBTC) is a non-refundable tax credit for qualifying home buyers. HBTC is calculated by multiplying the lowest personal income tax rate for the year by $5,000. For example, in 2017, the lowest rate was 15 per cent, so the 2017 HBTC was $750 ($5,000 x 0.15 = $750). If you and your spouse are buying a home for the first time, you will likely qualify for HBTC. This means you or your spouse have already bought a qualifying home, and haven’t owned or lived in a primary residence for at least four years before the date of purchase. 

Land Transfer Tax Rebate

Those purchasing property for the first time may qualify for a rebate on the provincial Land Transfer Tax, depending on the province. For example, in Ontario, first-time home buyers can receive a maximum rebate of $4,000 (or $2,000 for those who registered a land transfer at the rate prior to January 1, 2017). Municipalities with land transfer taxes may also offer rebates for first-time home buyers.