If you're a first-time home buyer in Canada, there are several tax credits and incentives available that could help make purchasing your first home more affordable. Here's a breakdown of some key options:
First-Time Home Buyers' Tax Credit (HBTC)
The First-Time Home Buyers' Tax Credit allows eligible individuals to claim a non-refundable tax credit of up to $1,500. To qualify, you must purchase a qualifying home and meet certain conditions, such as not having lived in another home you owned in the year of acquisition or in any of the four preceding years, unless you are a person with a disability34.
Home Buyers' Plan (HBP)
The Home Buyers' Plan allows you to withdraw up to $35,000 from your Registered Retirement Savings Plan (RRSP) to buy or build a home. This withdrawal is tax-free if it is repaid within the required timeframe. It's a useful way to access funds for your down payment without immediate tax implications1.
First Home Savings Account (FHSA)
The FHSA is a registered account designed to help you save for your first home with tax advantages. Contributions to this account are generally tax-deductible, and withdrawals used for buying or building a qualifying home are tax-free, providing a dual benefit of tax savings and growth1.
GST/HST New Housing Rebate
If you're purchasing a new home, you might be eligible for a GST/HST rebate, which can reduce the upfront costs associated with homeownership. This rebate is available for new home purchases and aims to make homeownership more affordable1.
Additional Programs
Beyond the CRA-administered incentives, the Government of Canada also offers a first-time home buyer incentive and funding for new construction, specifically for Indigenous housing on and off reserves1.
To take advantage of these credits and incentives, it's crucial to file your income tax return, as this is the first step in qualifying for these benefits. For more detailed information, you can visit the Canada Revenue Agency's website or consult specific pages related to each program134.
Citations
- https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2023/first-time-home-buyer-tax-incentives.html
- https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4027/doing-business-canada-gst-hst-information-non-residents.html
- https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2022-plan-grow-economy-make-life-more-affordable/first-time-home-buyers-tax-credit.html
- https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/about-your-tax-return/tax-return/completing-a-tax-return/deductions-credits-expenses/line-31270-home-buyers-amount.html