Available Homebuyer Assistance Programs

Becoming a homeowner is wonderful and exciting, but it can also seem difficult and stressful particularly for families, young people, and newcomers. For many, buying a home represents the most important purchase of their life. Fortunately, the Government of Canada offers various programs to support homebuyers.

In this article, Vistoo compiled a list of the homebuyer assistance programs available right now across Canada. We describe the key features and requirements of each program, providing insights into how they can help you in buying your dream home.

First-Time Home Buyer Incentives

When you’re new to the homebuying journey, you need to make the most of the various incentives that the federal and provincial governments put at your disposal to help you buy your first home. It’s important that you be aware of the requirements for each incentive and that you check whether you’re eligible or not. In some cases, some programs might apply to you even if you have previously owned a home.

March 21, 2024 was the deadline for the first-time home buyer incentive by the Canada Mortgage and Housing Corporation (CMHC). This program, featuring a shared-equity mortgage with the Government of Canada, has recently been discontinued. It offered to contribute to your down payment with a loan of 5 or 10% of your home’s purchase price. The objective was to reduce your monthly costs and make buying your first home more affordable.

Although this program was discontinued, there are many other incentives available to you, like:

• First-Time Home Buyers’ Tax Credit (HBTC)
• Land Transfer Tax Refunds for First-Time Homebuyers (LTTR) (Ontario)
• Home Buyers’ Tax Credit (Quebec)
• RRSP Home Buyer’s Plan (HBP)
• First Home Savings Account (FHSA)

Let’s examine each of these incentives and see what financial assistance they offer.

First-Time Home Buyers’ Tax Credit (HBTC)

The HBTC is a federal government program that is designed to help you once you’ve purchased your first home. If you’re eligible, it allows you to claim up to $10,000 on your tax return, which will provide you with a tax credit of up to $1,500. Just enter $10,000 on line 31270 of your return and remember to apply for the tax credit in the same year you buy your home.

Land Transfer Tax Refund (LTTR) in Ontario and Home Buyer’s Tax Credit in Quebec

The land transfer tax, also called property transfer duties or “Welcome Tax,” is a tax you must pay to the province or to the municipality when you buy a property. In Toronto, it’s both, meaning you must pay a municipal land transfer tax and a provincial land transfer tax.

However, there are measures in place to help people who are buying a home for the first time.

Ontario offers a land transfer tax refund for first-time homebuyers, covering all or part of the amount due. To be eligible for this incentive, you cannot have owned a home or interest in a home anywhere in the world.

If you qualify as a first-time homebuyer, the Ontario land transfer tax is not payable on the first $368,000 of your new home. Note that the maximum amount of the refund is $4,000. If you’re buying a home in Toronto, you’ll be happy to hear the city has a similar program, and that you can take advantage of both programs without penalty.

If you’re considering buying a home in Quebec, the province has its own financial assistance program, called the Home Buyers’ Tax Credit, which can grant you a maximum tax credit of $1,400. 

Home Purchase Assistance Program, in Montreal

If you want to buy a home in Montreal, such as a luxurious condo by Groupe Kevlar in rue Drummond, Ville-Marie, then you’ll be glad to know that Montreal has a home purchase assistance program. Depending on your eligibility, this program either offers a lump sum when you purchase a new property or a refund of your welcome tax when you purchase an existing property. For a new home, you might be able to get financial assistance between $5,000 and $15,000, and you can get an extra $5,000 if your building has LEED certification. Keep in mind that many conditions apply, and the amount you’re eligible for will depend on different factors, including:

• The number of buyers
• Whether they have children
• The age range of the children
• Whether they’re buying a home in the downtown area or elsewhere
• Whether they’re first-time buyers or experienced buyers

For example, one or more buyers with at least one child under 18, buying property in downtown Montreal could potentially unlock $15,000 in financial assistance, provided the maximum purchase price falls under $610,000.

Many municipalities have grants and incentives for first-time home buyers in Canada, and it’s important that you do your research.

RRSP Home Buyer’s Plan (HBP) and First Home Savings Account (FHSA)

The RRSP Home Buyer’s Plan is a federal government program that lets first-time homebuyers withdraw funds from their RRSP to make a down payment for their new home. In 2024, the withdrawal limit was increased to $60,000 per person. In other words, if you and your spouse have an RRSP, you could use the HBP to withdraw up to $120,000. It’s worth noting that the funds are tax-free at the moment of withdrawal.

Keep in mind that the amounts you withdraw will have to be paid back to a RRSP within a period of 15 years. You’ll have minimum annual payments to make based on your HBP.

For people considering buying a home in the next few years, you might have heard of the FHSA. Several banks now offer a first home savings account to help you on your journey towards owning a home. Just like an RRSP, your contributions to your FHSA are tax-deductible. In addition, the funds you withdraw for buying your first home are tax-free. 

What are the main features of an FHSA? Consider the following:

• Every year, you have a participation room of $8,000. 
• Unused participation room carries over to the next year, up to a maximum of $8,000.
• The lifetime limit is $40,000. This is the maximum amount you can contribute to your FHSA.
• You have to close your FHSA within 15 years.

Remember that you can combine some of the tax credits and financial assistance programs. Make sure to study all the available options and verify your eligibility. 

Experience Peace of Mind With Vistoo

You’ll be in safe hands with Vistoo’s proactive and experienced team, who will offer you support services every step of the way. Whether you’re eyeing condos under construction in Montreal, multiplexes in Gatineau that are ready to move in now or houses in Guelph that are still in the project phase, Vistoo offers a wide range of new constructions across Quebec and Ontario. 

Take advantage of our user-friendly platform with its innovative search bar and diverse set of filters and find exactly what you’re looking for. Let Vistoo guide you in your search for your new home!