First time home buyer

This program can be very useful for first time buyers who need to a lot of money up front. It allows you to withdraw up to $35,000 from your registered retirement savings plan (RRSPs) to buy a home, provided you meet the criteria, like simply being a first time buyer. In terms of paying the loan back, you have 15 years. Best part: You don’t pay any interest at all. For more info and to see if you qualify, visit the Canada Revenue Agency web site.

Beginning January 1, 2017, no land transfer tax would be payable by qualifying first‑time purchasers on the first $368,000 of the value of the consideration for eligible homes. First‑time purchasers of homes greater than $368,000 would receive a maximum refund of $4,000.  If you buy a house in Toronto, you have to pay twice, one for provincial land transfer tax and one for Toronto land transfer tax.  

If you purchase your home with between 5% and 20% down on a conventional mortgage, you’ll need CHMC mortgage loan insurance.  It insures the bank so they will not lose money on what they consider a high ratio mortgage. The cost is ultimately passed on to you, the buyer.  Many lenders will add this amount into the mortgage so you won’t have to pay for it all at once.  The less you put down on your new home, the more you will pay in CHMC insurance.  On another note:  As of 2019, CHMC allows first-time homebuyers to participate in a shared-equity mortgage program, called the First-Time Homebuyers’ Incentive.  The program permits households with qualified annual incomes under $120,000 to receive between 5 and 10 per cent of the cost of their home’s value in down-payment assistance, in exchange for a corresponding equity stake.

The Home Buyers’ Amount offers a $5,000 non-refundable income tax credit amount on a qualifying home acquired during the year.  For an eligible individual, the credit will provide up to $750 in federal tax relief.  Go to the Home Buyers’ Amount webpage to see if you are eligible.

The First-Time Home Buyer Incentive helps people across Canada purchase their first home. The program offers 5 or 10% of the home’s purchase price to put toward a down payment. This addition to your down payment lowers your mortgage carrying costs, making homeownership more affordable. If you live in Toronto, you will have even a better qualifying structure because things cost more here.  Find out more here.