Grants and incentives in 2023 for first-time home buyers in Quebec

 

Are you finally ready to embark on your first home purchase project in Quebec? Before you go any further, make sure you know about all the tools the federal and provincial governments have available to help ease the burden of this expense on your personal finances.

At Vistoo, the platform for new homes in Canada, we are here to help you make the most of the various grants and incentives available to you when you become a homeowner.

 

Grants for first-time buyers

 

There are several incentives and programs that can help you access home ownership. Some of these are primarily for first-time homebuyers.

There are some provinces, territories and municipalities in Canada that offer subsidies for the purchase of a first home. Several cities in Quebec offer assistance programs for first-time buyers.

In fact, these tools are very interesting and it is important to check if you are eligible, because these grants could substantially reduce the price of your first property.

Even if you have owned a home in the past, some of these programs may still be available to you, depending on the circumstances.

 

The CMHC grant

The Canada Mortgage and Housing Corporation, also known as CMHC, offers an incentive for first-time homebuyers.

This incentive, which is backed by the Canadian government, offers a mortgage loan that represents the equivalent of either 5% or 10% of the value of the property you wish to purchase.

The majority of the loans made by this program represent 5%, but a loan of 10% is possible when buying a new house.

When you make use of this subsidy, you agree, after 25 years or when you sell the property, to repay an amount that is based on the market value of the property you purchased. This amount is equal to the percentage you benefited from on the original purchase.

For example, if you received a 5% subsidy, you will have to pay back 5% of the market value of the property either at the end of the 25 years, or when you sell the home.

This 5% will be higher or lower than the original loan, depending on the fluctuation in the value of the property.

Finally, a few conditions for eligibility must be met, the most important ones being:

• The buyer’s total annual income cannot exceed $120,000 ;
• The total loan cannot exceed an amount equivalent to 4 times your eligible income;
• You or your partner is a first-time homeowner.

Don't hesitate to inquire about this grant and learn more if you are in the process of buying your first home, especially if you are looking to buy a new house, since this is the best way to take advantage of this program.

 

The Home Buyers' Plan (HBP)

The HBP is a program that allows you to buy a home by withdrawing money from your RRSP to make a down payment.

This plan offers several advantages to first-time buyers, including:

• Funds withdrawn in this manner for the purchase of a first property are tax-free;
• For this purchase, you are allowed to withdraw up to $35,000, or even $70,000 if you are in a couple;
• The repayment is then made over 15 years, without interest;
• And much more!

For this program, you can not have been the occupant of a property owned by you or your spouse in the preceding four years.

An exception is granted for divorced or separated persons who, since 2020, have been eligible to take advantage of this plan again, provided that their first withdrawal has been repaid in full.

 

Federal and provincial tax credits

Both the Quebec and Canadian governments offer tax credits for first-time buyers.

Like the HBP, if you have not lived in a home you or your spouse owned in the last four years, you may be able to reduce your taxes in the year of purchase.

In Quebec, the maximum amount of this tax credit is $1,500 and this amount is shared among eligible first-time homebuyers. At the federal level, a first-time buyer is entitled to a $750 tax credit.

Moreover, many provinces, including Quebec, offer a total or partial refund, depending on specific criteria, of taxes on the purchase of a new home or the major renovation of an existing home.

This is yet another excellent reason to shop for a new home in Quebec’s real estate market.

For future buyers: the CELIAPP

If you're planning to buy a home in the next few years, a new savings plan will be introduced in 2023 to help you save for that big purchase.

The Tax-Free Savings Account (TFSA) for first-time home buyers, or CELIAPP, is a new savings account that will allow you to put aside up to $40,000 in savings for your first home.

Like an RRSP, it allows you to contribute while reducing your taxable income, and like a TFSA, the profits generated from your investments are not taxable.

If you use the funds to buy your first home, withdrawals from this account are not taxable.

Finally, it can be combined with the HBP and other home ownership grants and incentives.

If this savings plan appeals to you, it should be available later this year at any financial institution that offers TFSA registration.

To find the real estate project or new home of your dreams, there is no better tool than our interactive map to discover all our real estate listings.

So whether you're looking for a home in Brossard, in the heart of Montreal or anywhere else in the province, you'll find what you're looking for with Vistoo: Contact us today and a team of experts will answer all your questions.