Buying your first home is a big deal, but it doesn’t have to be overwhelming. In Canada, there are several programs designed to ease the process and make homeownership more accessible. Here’s a closer look at the key incentives every first-time homebuyer should know about:
1. Tax-Free First Home Savings Account (FHSA)
The FHSA is a fantastic way to save for your first home. You can contribute up to $8,000 each year, with a lifetime maximum of $40,000. The best part? Your contributions are tax-deductible, and when you’re ready to buy, the money you withdraw is tax-free. Plus, if you don’t max out the $8,000 in one year, the unused portion rolls over to the next. Combined with the Home Buyers’ Plan (HBP), the FHSA can be a powerful savings booster.
2. Home Buyer’s Plan (HBP)
With the HBP, you can withdraw up to $60,000 from your Registered Retirement Savings Plan (RRSP) to put towards your first home. You won’t be taxed on the withdrawal as long as you repay it over 15 years. By pairing the HBP with the FHSA, you’ll have more funds to work with, helping you build a larger down payment and easing the financial pressure when buying.
3. 30-Year Mortgages for New Builds
Exciting changes are coming! Starting December 15, 2024, 30-year mortgage amortizations will be available to all first-time homebuyers and all buyers of new construction homes. This means lower, more manageable monthly payments, making it easier to get into the market.
4. First-Time Home Buyers’ Tax Credit (HBTC)
The HBTC offers up to $1500 in tax relief to help with some of the extra costs that come with buying a home, like legal fees and inspections. While it won’t cover everything, it’s a helpful relief during a time when every little bit counts.
Make These Incentives Work For You
These programs are designed to complement each other. Combining the FHSA and HBP can significantly increase your down payment, while the option of a 30-year mortgage helps keep your monthly payments manageable. Speaking with a mortgage advisor can help you customize the best plan for your situation.
Ready to explore your options? Contact our Sales Team today to learn more about how these programs can work for you and to get started on your homeownership journey!
