Government help for first-time home buyers

Home Buyers’ Plan (HBP)

This federal government program allows you to borrow up to $35,000 from your RRSPRRSP See Registered Retirement Savings Plan.+ read full definition taxTax A fee the government charges on income, property, and sales. The money goes to finance government programs and other costs.+ read full definition free to fund your purchase. If both you and your spouse qualify, you can each borrow up to $35,000 from your RRSPs, for a total of $70,000. The money must have been in your RRSP for at least 90 days. Here’s how it works:

  • Qualifying for the HBP – You must not have lived in a home owned by you or your spouse in the last 5 years. You must have entered into a written agreement to buy or build a home that you intend to occupy as your principal residence.
  • Repaying your RRSP – You have up to 15 years to repay the amount you borrowed from your RRSP. You must start to make repayments in the second year after the year in which you made your withdrawal(s). In general, you have to repay 1/15 of the total amount you withdrew each year. After 15 years, any amount you have not paid back to your RRSP will be taxed. You will owe this tax when you file your income tax return in the following year.

Learn more about how the HBP works.

Find out about municipal government help for first-time buyers. Your city may offer additional refunds.

Land Transfer Tax (LTT) Refund

You may receive a refund from the Ontario government of up to $4,000 of the land transfer tax you paid on your first home. Other provinces have similar programs. Here’s how it works:

  • You must be at least 18 years old.
  • You cannot have previously owned a home, or an interest in a home, anywhere in the world.
  • Your spouse cannot have owned a home, or an interest in a home anywhere while they were your spouse.
  • You may receive the refund at the time you register your home purchase. If not, you must apply for it no later than 18 months after the registrationRegistration A requirement for any person or company trading investments or providing advice in Canada. Securities industry professionals are required to register with the securities regulator in each province or territory where they do business.+ read full definition date.

Learn more about how the LTT Refund works.

First-time Home Buyers’ Tax Credit (HBTC)

You or your spouse can claim this tax creditTax credit The amount you can deduct from your income when you file your taxes. This lowers the tax that you owe.+ read full definition on your annual income taxIncome tax A charge you pay based on your total income from all sources. The Canadian government and your province set the rate.+ read full definition return. The credit is based on an amount of $5,000. To calculate, multiply the lowest personal income tax rateTax rate The rate at which you or a business pays tax on income. Often stated as a percentage, such as 25%.+ read full definition for the year (15% in 2011 and 2012) by $5,000. For these years, the maximum credit is $750. Here’s how it works:

You or your spouse must have acquired a qualifying home acquired after January 27, 2009.

You cannot have lived in another home owned by you or your spouse in the year you buy your first home – or in any of the 4 preceding years.

Learn more about how the HBTC works.

3 key points

Help for first-time buyers:

  1. Home Buyers’ Plan
  2. Land Transfer Tax Rebate
  3. First-time Homebuyers’ Tax Refund
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