First Time Home Buyers in Canada
There are several rebates, programs, grants and tax credits available for Canadian first time home buyers. Federal programs are available to all Canadians while provincial first time home buyer programs are only available to residents in that province.
Canada First Time Home Buyer Programs
First Time Home Buyers RRSP Plan (up to $25,000)
The First Time Home Buyers RRSP Plan (HBP) allows first time home buyers to withdraw up to $25,000 from their RRSPs to buy or build a home for yourself or for a related person with a disability. The withdrawn amount must be repaid within 15 years, subject to a minimum annual repayment that is 1/15 of the amount withdrawn. If the full $25,000 is withdrawn, the minimum annual repayment is $1,667. If less than the minimum is repaid in any particular year, the balance is added to the taxpayer’s income. To qualify for the Home Buyers Plan, an individual must not have not owned a home during the last 4 full calendar years.
Follow the link for more information on the RRSP Home Buyers Plan.
Home Buyer Tax Credit (HBTC)
You can receive up to $750 back from the federal government by applying for the home buyer tax credit in the year the home was purchased. To obtain the tax credit, complete line 369 on your personal income tax return.
You will qualify for the HBTC if:
• You, your spouse or common-law partner acquired a qualifying home; and
• You did not live in another home owned by you or your spouse or common-law partner in the year of acquisition or in any of the four preceding years.
If you buy a house, with a spouse or common-law partner, either one of you can claim the credit or you can share the credit. However, the total of your combined claims cannot exceed $750. You must occupy the home as your principle residence no later than one year after the home was purchased. For more information see HBTC or home buyer tax credit.
Provincial First Time Home Buyer Programs
Jump To Your Province:
Alberta Land Transfer Tax
Unlike other provinces, Alberta does not have a land transfer tax. Alberta does however charge a nominal fee for title registration AND mortgage registration.
Title Registration Fee: There is a base fee of $50 plus an additional $1 charge for every $5,000 of the fair market value of the property (rounded up to the nearest $5,000).
Mortgage Registration Fee: There is a base fee of $50 plus an additional $1 charge for every $5,000 of the mortgage loan (rounded up to the nearest $5,000).
This means a home purchase of $350,000 would incur a total fee of $240.
$50 + (($350,000 / $5000) x $1) plus $50 + (($350,000 / $5000) x $1)
BC First Time Home Buyers Land Transfer Tax Credit (up to $6500)
Home purchases in BC are subject to a land transfer tax of 1% of the first $200,000 of the price, and 2% thereafter. The BC Land Transfer Tax Credit is a refund of the cost of the land transfer tax for first time home buyers up to a maximum of $6,500. This will allow first time home buyers to purchase a home up to $425,000 without having to pay any land transfer fee. Home purchases above $450,000 disqualify first time home buyers from the ENTIRE credit. This means if the purchase price is $450,000 the land transfer tax would still cost first time home buyers $7000. Partial credits are provided for purchases between $425,000 and $450,000. See partial credit scale. To qualify for the BC Land Transfer Tax Credit, the property must be owner occupied for at least 1 year, you cannot have owned ever a home, or an interest in a home, anywhere in the world.
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If two people buy a home together, and one is eligible for the First Time Home Buyers land transfer tax rebate, and one isn’t, then tax will be charged proportionately to their ownership share. See rate table for 50% rebate.
Here is a BC land transfer tax calculator for an easy calculation.
For more information see BC Land Transfer Tax Credit.
Manitoba First Time Home Buyers Land Transfer Tax Credit
New Brunswick First Time Home Buyers Land Transfer Tax Credit
Newfoundland First Time Home Buyers Land Transfer Tax Credit
Nova Scotia First Time Home Buyers Land Transfer Tax Credit
Ontario First Time Home Buyers Land Transfer Tax Credit (up to $2000)
The Land Transfer Tax Credit is a refund of the cost of the provinces land transfer tax up to a maximum of $2,000. This will allow first time home buyers to purchase a home up to $227,500 without having to pay any land transfer fee. Any amount higher than $227,500 is taxed a rate of approximately 1.5%. To qualify the property must be owner occupied. The first time home purchaser may claim the full maximum amount or a proportion of the maximum refund amount. To qualify for the Land Transfer Tax Credit, you cannot have ever owned a home, or an interest in a home, anywhere in the world. The refund can be given instantly at the lawyers office but advise the lawyer prior to the closing date if you qualify for the rebate
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The refund amount is reduced when one or more of the transferees are not a first time home buyer. The reduction will be proportionate to the interest in land acquired by the individuals who are not first time home purchasers. For example, a parent who is not a first time home buyer and child who is a first time home purchaser, purchase a home with equal 50/50 interests, the child may claim 50% of the land transfer tax refund. The child’s claim cannot exceed 50% of the maximum allowable refund, i.e., 50% of $2,000.
Toronto First Time Home Buyers Land Transfer Tax Rebate (up to $3725)
First time home buyers of a newly constructed or re-sale residential property qualify for the Toronto Land Transfer Tax Rebate. The maximum allowable rebate is $3,725.00. This allows first time home buyers in Toronto to purchase a home valued as high at $400,000 without having to pay a Toronto land transfer tax. Any additional amount above $400,000 will be taxed at a rate of 2%. The property must be owner occupied.
If you are eligible for a rebate of all or a portion of the MLTT you owe, your lawyer will be able to claim the rebate electronically through Teraview version 6.0 software when he/she registers your transfer/deed.
More information on the Toronto Land Transfer Tax Rebate and the Toronto land transfer tax rate can be found on the City of Toronto website.
Prince Edward Island First Time Home Buyers Land Transfer Tax Credit (up to $2000)