First-time homebuyers can take advantage of a number of government programmes and tax credits. The Home Buyers’ Plan enables you to access up to $35,000 from your RRSPs ($70,000 for a couple) for a down payment on your first home. If you return the funds to your RRSP within 15 years, you won’t owe taxes or face a penalty.

The First-Time Property Buyer Incentive provides a zero-interest loan of up to ten percent of the purchase price of a home to qualified first-time purchasers. After 25 years or upon the home’s sale—at the time’s fair market value—the government is entitled to repayment of its initial investment in the property. While the scheme has its advantages, mortgage broker Patton warns that it may restrict first-time buyers’ budgets. This is one of the main reasons why the federal government decided to prolong the programme through March 31, 2025, as part of the 2022 budget. Furthermore, the government has stated that “solutions are being explored to make the programme more flexible and sensitive to the needs of first-time home buyers, especially single-led households.”

Canadians who have not been homeowners for four years or more are eligible for the Home Buyers’ Tax Credit. The maximum tax credit available to first-time homeowners is $5,000 (equivalent to a $750 refund). For properties purchased on or after January 1, 2022, the federal government proposed doubling the credit to $10,000 in its 2022 budget. Homebuyers could receive a refund of up to $1,500 as a result of the revised credit amount.

FHSA, the pioneering first-time homebuyer savings account The federal government will introduce a new type of registered account in the 2022 budget to assist first-time homebuyers in saving for a down payment. Like a tax-free savings account (TFSA) or a registered retirement savings plan (RRSP), earnings on interest, dividends, and capital gains are not subject to taxation, and neither are contributions to or withdrawals from the account. No unused contribution space can be carried over from year to year, and first-time homebuyers are not eligible to use both the FHSA and the Home Buyers’ Plan. The maximum annual contribution for an individual is $8,000, with a lifetime maximum of $40,000. Any money left in an FHSA after 15 years must either be utilised to buy a home, moved to an RRSP or RRIF, or removed as taxable income. In 2023, FHSAs will become available thanks to the government’s collaboration with financial institutions.

To qualified buyers, the governments of Ontario, British Columbia, and Prince Edward Island all give tax refunds on land transfers, and the city of Toronto does as well. The eligibility requirements and potential payout amount are territory-specific.