Just over four years since its launch, the Canada Mortgage and Housing Corporation (CMHC) recently announced the discontinuation of the First-Time Home Buyer Incentive. While this decision may initially seem like a setback for affordability in the housing market, there are still a variety of alternative options available across Ontario to support first-time home buyers. Let’s take a look…
Home buyer’s plan
The Home Buyers’ Plan (HBP), which allows first-time homebuyers to withdraw up to $35,000 from their Registered Retirement Savings Plan (RRSP) for a down payment. This amount doubles if purchasing a home with a partner, offering a potential total of $70,000. However, funds withdrawn from the RRSP must be repaid over a 15-year period.
Land transfer tax refund
In Ontario, where the land transfer tax can make up a significant portion of closing costs, a land transfer tax refund exists to aid first-time homebuyers. This rebate can be claimed only once, with the maximum rebate in Ontario being $4,000, and must be applied for within 18 months of the transfer date.
First home savings account (FHSA)
The First Home Savings Account (FHSA) offers a promising avenue for first-time homebuyers to stack-up their savings tax-free. This initiative allows individuals to contribute up to $8,000 annually to the account. However, the funds withdrawn from the FHSA must be used towards the purchase of one’s first home to avoid paying tax on it.
Home buyers’ amount (HBA)
Additionally, the Home Buyers’ Amount (HBA), provides a non-refundable tax credit for first-time homebuyers. Allowing buyers to claim $10,000 on their tax return for a maximum rebate of $1,500 for the year in which they purchased their qualifying home.
So, what does this mean?
Fortunately, despite the discontinuation of the First-Time Home Buyer Incentive, numerous other incentives remain available to help in financing your first home. By exploring these options and staying informed about local programs and tax credits, you can discover your path to first-time homeownership with confidence.
Have questions about purchasing your first home? Contact our trusted and experienced agents today, we’re ready to help!
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